Office space availability rising, ahead of national average
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Office space availability is rising locally, following a national trend stemming from increased remote work and costs.
Why it matters: The data is a sign that vacancy rates, already at historic highs, will likely grow higher, Axios' Emily Peck reports.
At the same time, Detroit developers are making a major play to attract employers looking to upgrade their in-person spaces.
- The District Detroit's new $1.5 billion project calls for three new office buildings. Project leaders say new office space is lacking and is in high demand.
Zoom in: Detroit's available space is 16.6% as of the end of March, up from 12.9% three years ago, according to data from CoStar.
- The national average is 16.4%, up from 15.2% at the end of 2021.
Of note: Office availability is different from office vacancy rates. Availability doesn't just look at empty offices, but includes occupied office space where the tenant notified the landlord they won't be renewing.
- And, crucially, availability takes into account leased office space where a tenant is trying to sublet the office.
It's that last category — the amount of space available for sublease — that's jumped up in the wake of the pandemic.
- Over the last three years it's been "piling up and up and up," said Phil Mobley, national director of office analytics at CoStar. "There's a strong likelihood that much of that is going to convert into vacancy when the original lease term expires."