New construction in West Michigan providing industrial space with inventory at peak capacity
West Michigan’s commercial real estate forecast for this year remains on a course for continued growth. The 2020 Colliers Annual Economic and Commercial Real Estate Forecast held at DeVos Place indicates demand remains high for industrial and office space. But is there enough supply?
“Industrial has been operating at a peak capacity for five, six years. We’ve been out of space for years.”
With industrial vacancy rates at 2.39%, Duke Suwyn, CEO of Colliers International West Michigan, explains that over the past 15 to 20 years the area’s industrial space availability relied on the shutdown of large manufacturing plants supplying inventory.
“So, our inventory now is basically new construction, and all of a sudden we have now come to the point where there are small lots, but if you want to do a big project, there are very few opportunities with land that is infrastructure, zoned and ready to go. Steelcase owns almost every bit of it on the southeast side. Site 36 is the last major piece, 80 acres, that’s going to develop this year. Walker is almost full, there are some small sites left. We’re in a position now that that’s hindering us. It’s hindering us. So, industrial has got some work to do to figure that out. I think the M-50/Lowell exit is going to be a big one in the future but we’ve got to get utilities there.”
Creativity is the key and that goes for demand for what Suwyn describes as the right kind of office space.
“We’re going to need some Class A space. We’re going to need some more high-tech space. We’re going to need some redeveloped space. We have the ability, we have some locations but it’s different space, bigger footprint, things like that…We still have to convert some buildings, but we're now to the point where there's not that many lots left. We’re going to start taking buildings down to put new buildings up and it's going to go tall. There was a small building, a 10,000-footer sold downtown here this past fall, small lot, about a quarter acre, four offers on it. The building's only 10 years old. Four offers on the property, two of them were to tear the building down and build a tower on it on a quarter acre lot. It's just the things that have to happen and we're going to see that.”
Patrick Center, WGVU News.