Ann Arbor real estate firm Swisher Commercial's annual Year-End Vacancy Report found surprisingly modest changes in Ann Arbor-area office vacancy rates in 2020, despite the COVID-19 pandemic.
The report, released Jan. 4, found that the total market vacancy rate for office and flex space was 8% for 2020, an increase from 2019's 5.8% vacancy rate. Swisher surveyed 304 buildings that are 5,000 square feet or larger, totaling approximately 12 million square feet. The report also breaks out vacancy rates by eight sub-markets in the area.
Two other notable findings delivered in the eight-page report are that the office vacancy rate increased from 6.6% to 9.4% in the past year. Vacancy rates for flex space – space that is usually utilized as combined office, research, and warehouse space – have only slightly increased from 3.2% to 3.4% in the past year.
Bart Wise, an associate broker and shareholder at Swisher Commercial, says Swisher's latest findings provide a glimpse of the pandemic's initial impact and that he is just "one among many who are wondering what 2021 will look like." Wise says he was surprised by the vacancy rate for flex space, nothing that the 0.2% increase from last year is "close to saying that it hasn't really changed."
"This finding shows what we intuitively knew, which is that technology and light industrial businesses in our area have to work in their offices," he says. "They just can't grab their stuff and work from home."
Wise stresses that although there is an increase in the overall vacancy rate, 8% is still considered a very moderate vacancy rate.
"At the end of last year, we looked at everything and felt thankful for the unique economy and the unique community we have here in Washtenaw. Other communities have suffered much more dramatically," Wise says. "We have a vibrant town and a lot of innovative businesses, and that will be reflected in the future."
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Jaishree Drepaul-Bruder is a freelance writer and editor currently based in Ann Arbor. She can be reached at firstname.lastname@example.org.
Images courtesy of Swisher Commercial.