Market availability remains elevated at close of year despite uptick in transaction volumes
The Metro Detroit region experienced a solid close to 2023 as measured by transaction volume. The 1.1 million square feet (msf) transacted in the fourth quarter was Detroit’s best performance since the pandemic fundamentally altered office utilization and occupier demand. A large portion of the quarter’s activity was comprised of Blue Cross Blue Shield of Michigan’s renewal of 307,000 square feet (sf) at 500 Renaissance Center. Additionally, some of the deals closed this quarter represented significant tenant rightsizing, including TD Auto Financing’s relocation into 35,000 sf at Southfield’s Two Towne Square that marked a 77 percent reduction in space from its previous occupancy in Farmington Hills. Overall Q4 market availability stood at 24.4%, minimally changed from the previous quarter, as well as up by just 60 basis points (bps) from a year ago. The city of Detroit exhibited greater softening conditions, with availability increasing 170 bps to 19.4%.