by Dan Rafter
Colliers International|West Michigan shared some good news about the commercial real estate market in Western Michigan during its Forecast Breakfast held Jan. 31.
Paul Isely, a professor at Grand Valley State University’s Seidman College of Business in Grand Rapids, Mich., told the audience that West Michigan’s economy will keep growing in 2014. That, of course, is good news, not only for the state but for the professionals who practice commercial real estate here.
After all, if the region’s economy is getting stronger, this means more demand for everything from office space to retail storefront space.
Isely’s predictions? He said that employment in Western Michigan would rise by 2.7 percent to 3.1 percent in 2014.
The industrial sector has performed well throughout the Midwest. This is no different in Western Michigan. During the breakfast forecast, Colliers officials said that the vacancy rate for industrial space fell to 6.6 percent in 2013.
Matt Abraham, principal with Colliers, said that there is actually a shortage of industrial space in the region today, something that might result in spec industrial construction. Last year, the industrial market in Western Michigan absorbed 865,000 square feet. Abraham said that industrial would have seen more absorption if more industrial space had been available in 2013.
The fourth quarter of 2013 marked the sixth consecutive quarter of positive absorption in the industrial market, according to Colliers. The region saw some significant industrial transactions during this quarter.
Alliance Beverage purchased an industrial facility at 4500 60th St. SE in Caledonia. Alliance paid more than $1.7 million for the property on more than 31 acres. Gourmet International spent $861,000 to purchase the facility at 5253 Patterson Ave. SE in Kentwood, while Interurban Transit Partnership spent $250,000 to the property at 5990 S. Division Ave., also in Kentwood.
And to no one’s surprise, Colliers officials predicted big things for the region’s apartment market. Multi-family has been especially strong across the Midwest. In Western Michigan, this means more apartment developments in the pipeline. Construction will start on several of these in 2014.
Colliers had good news for the retail market, too. According to the company’s fourth quarter 2013 retail report, overall retail vacancy in Western Michigan fell to 9.35 percent. From Traverse City down to New Buffalo, the Western Michigan region saw 54 leases and 68 retail sales in the fourth quarter of 2013.
One of the bigger deals in the quarter? Planet Fitness moved into the former Menards space in the 28th Street SE corridor near the rear of the Centerpointe Development in Grand Rapids. Planet Fitness leased half of the space here, leaving 37,308 square feet in the former Menards still vacant. This Planet Fitness will be the second largest in the country.