Ann Arbor office and flex space vacancies dropped to historic lows in 2019, according to the recently released Year-End Vacancy Report from Swisher Commercial. The commercial real estate agency has released the report annually for the last 27 years, breaking down market trends in Ann Arbor-area office and flex space.
Here are three notable takeaways from Swisher's latest survey, along with insight from Bart Wise, associate broker and vice president at Swisher.
1. The total market vacancy rate for office and flex space is 5.8%. (This rate is down from a year ago, when it was 6.4%.) A graph in the vacancy report shows a visual picture of the market's ups and downs since 1993.
"The last time the overall vacancy rate dropped below 6% was 20 years ago, in 1999," Wise says.
2. The vacancy rate for flex buildings is at an all-time low of 3.2%. (Flex space was defined as high-bay-type buildings that often combine office, high-tech, research, and warehouse space.)
"There is an extreme shortage of flex space, which means that businesses that use this kind of space will have a more difficult time finding expansion opportunities in Ann Arbor," Wise says.
3. There are currently only four buildings with 20,000 or more vacant square feet in the South Office Area, Swisher's designation for 3.35 million square feet of Ann Arbor south of downtown. Why is this notable?
"Office tenants in need of over 20,000 square feet who want to locate in Ann Arbor’s south area will not have as many choices as they have had in the past," Wise says.
The full report can be found here. Overall, Wise says he wasn't surprised by any of the results.
"The leasing activity in 2019 was steady to strong, whereas there was very little new construction to add space to the inventory," he says. "If businesses are absorbing the vacant space while there is no new inventory created, the result will be lower vacancy rates."
Jaishree Drepaul-Bruder is a freelance writer and editor currently based in Ann Arbor. She can be reached at email@example.com.
Image courtesy of Swisher Commercial.