Overview Detroit Industrial
Heading toward the final days of 2022, Detroit hasn’t
experienced the surge in logistics leasing and
construction comparable to what’s occurring in the Inland
Empire or Dallas. Still, market conditions continue to
work in Motor City landlords’ favor. Detroit’s industrial
leasing is just below the all-time high, which was set in
21Q3, and the market vacancy rate of 4.7% is sitting
near an all-time low. E-commerce-related tenants
serving the local population, such as Amazon, and third

party logistics providers like FedEx were increasingly
expanding their regional footprint until recent months
when some companies like Amazon delayed or canceled
five projects planned or underway across Michigan. Over
the past few years, increased demand for distribution
and warehouse locations has benefited properties near
critical logistics and manufacturing nodes spread across
the Detroit metro, like the Detroit Metropolitan Wayne
County International Airport, Detroit’s east side, and
Pontiac/Auburn Hills.

While development activity continues, with 10.9 million
SF underway, there’s little risk that new supply will tilt the
market dramatically in tenants’ favor during 2022–23. At
618 million SF, Detroit has the eighth-largest industrial
inventory of any market in the U.S., and current projects
under construction represent only 1.8% of this inventory.
Meanwhile, new projects have been filling quickly, with
roughly 5% of the 22 million SF that’s been delivered
since 2017 still listed as available for lease. While
decelerating in recent months, rent growth remains
above its five-year average at 7.1% year over year as of
22Q4. Considerations surrounding the local and national
economy may weigh on the robust rent performance of
the past few years as we head into 2023. Continued
growth might be expected in the Central I-96 Corridor,
particularly within Novi and Wixom. These areas are
adjacent to the intersection of interstates 275 and 96/696
and have more space for development than mature
submarkets closer to the urban core and continue to
attract interest from developers, investors, and tenants
such as U.S. Autoforce and Moba Americas.