Detroit Industrial Market Report
E-Commerce and Logistics Firms Drive Leasing in The Motor City;
Construction Activity Persists
Positive net absorption returned in the first half. State-mandated shutdowns in response to the pandemic led to over 2 million square feet re-entering the market in 2020. However, that situation has largely reversed over the first half of this year. The growth in e-commerce spurred demand for modern warehouse and distribution facilities, resulting in over 1.6 million square feet of space absorbed from January to June. Notable firms like Amazon and FedEx recently expanded their local footprints, combining for over 1 million square feet of lease agreements during that span. This rise in demand helped sustain rent growth in Detroit, with the average rate up 5.4 percent over the past 18 months ended in June. The proximity to various population hubs in the Midwest and Ontario attracts logistics firms, driving competition for quality space and serving as a tailwind for rent gains.