Detroit, MI Economic Overview
The city of Detroit, nicknamed “Motor City”, as its home to the headquarters of the Big Three American automakers, is located in southeastern Michigan, near the Great Lakes. With over 675,000 inhabitants, Detroit is the largest city on the U.S.-Canadian border. Combined with the greater metropolitan area, also known as Metro Detroit, the entire population of the Detroit MSA tops 4.3 million people. Due to its location along the Detroit River, with access to the Saint Lawrence Seaway via Lake Erie and beyond, Detroit is a major shipping and transportation hub, with the Detroit Metropolitan Airport being one of the most important in the U.S.
Location and demand are driving the Detroit commercial real estate market consistently upward.
Motor City is home to the headquarters of General Motors, Ford and Chrysler. Besides automobile manufacturing, other major industries that drive the business market in Detroit include finance, medical, health, education and energy. Numerous mixed-use and residential projects have hit the market or are underway, pushing the residential occupancy rate of Midtown Detroit to 96%. JPMorgan Chase began is investing over $100 million in Detroit's economy, focusing on development projects, job training, small business initiatives, and light rail.
Detroit, MI Commercial Real Estate Market
Detroit's diverse economy of manufacturing, healthcare and technology, along with the area's low cost structure, available workforce and educational infrastructure has continued to attract interest from major global businesses and investors. Detroit has been named the City Of Design by UNESCO, making it the first city in the U.S. to earn this recognition. Across the office, retail and industrial segments, commercial real estate in Detroit continues to post low vacancy, strong net absorption and increasing rental rates.
With almost 197 million square feet of office space in Detroit, absorption, vacancy and rents all continue to move in a positive direction. The build-to-suit market is being driven in part by large auto suppliers and other businesses finding it difficult to locate modern office space. This, in turn, has caused an increase in build-to-suits in Detroit, with nearly 190,000 square feet just hitting the market in 2016 and over 670,000 square feet of office space still in development as of mid-2017.
With nearly 250 million square feet of retail space in Metro Detroit the outlook remains strong. Nearly 540,000 square feet of retail space has hit the market in the first half of 2017, with an equal amount currently under development as tenants demand newer, more modern space.
There is just under 52 million square feet of industrial space in Metro Detroit, with an overall vacancy rate of under 4%. Rents, absorption and vacancy are all moving in the right direction and there are numerous high-quality projects in the pipeline that are attracting institutional investors. During the first half of 2017, 130,000 square feet of new industrial space has been brought to market, with another 80,000 square feet under development.
Employment in Detroit, MI
Several major corporations are based in Detroit including General Motors headquarters, Quicken Loans headquarters, Ally Financial HQ, DTE Energy HQ and Blue Cross Blue Shield of Michigan. Over 80,000 people are employed in Detroit's central business district, with thousands more in the submarkets of Midtown Detroit, Corktown and the Rivertown/Warehouse District. According to the BLS, the civilian labor force in Metro Detroit is just under 780,000.
A quick glance at the top 10 employers in Detroit shows the continuing diversification of the business base:
- Detroit Medical Center with almost 11,500 workers
- City of Detroit with nearly 9,600 employees
- Quicken Loan with almost 9,200 employees
- Henry Ford Health System with over 8,800 people
- Detroit Public Schools with a staff of nearly 6,600
- U.S. Government with over 6,300 workers
- Wayne State University with over 6,000 people
- Chrysler with over 5,400 employees
- Blue Cross Blue Shield with a staff of over 5,400
- General Motors with over 4,300 employees
There is a notable trend of businesses consolidating offices and relocating from the suburbs to the central business district in properties such as Renaissance Center and Kennedy Square. This, in turn, has driven the demand for modern offices space in Detroit and new retail development, and has pushed the residential occupancy levels downtown to very high levels, as people seek to live, work and play in the same area and avoid a daily commute.
Education in Detroit, MI
As the largest school district in Michigan, the Detroit Public School system has 66,000 students enrolled in its public schools and nearly 56,000 in its charter schools. Supplementing the public school system are various private schools along with the Roman Catholic Schools operated by the Archdiocese of Detroit.
One of the most prominent universities in Detroit is Wayne State University, located in the Midtown area of the city. The university is recognized as a prominent research university, with separate schools for the study of medicine and law. Other colleges and universities in Metro Detroit include the University of Detroit Mercy, Sacred Heart Major Seminary, University of Michigan and Michigan State University.
Commuting Time in Detroit, MI
At 24 minutes, the commuting time to get to work in Detroit is a little below the U.S. average of 24.8 minutes. Elevated rail in downtown Detroit, light rail, mass transit, the extensive highway system, and the movement of residents back into downtown Detroit continue to keep the commuting time in Detroit low.
Due to its proximity to Canada, Metro Detroit is a main transportation hub with heavily used ports, highways, railway and airports. In fact, the Detroit area is responsible for over 27% of the total trade transportation between the U.S. and Canada.
- Four major interstate highways surround Metro Detroit and also connect with Ontario and Toronto, Canada.
- Detroit Metropolitan Wayne County Airport (DTW) is the main airport serving the Detroit MSA and is one of the main hubs for Delta Air Lines and a secondary hub for Spirit Airlines.
- Mass transit bus service between Detroit and the suburbs is provided by the Detroit Department of Transportation and SMART, with the Regional Transit Authority overseeing the operation of all mass transit.
- Sophisticated elevated and light rail systems continue to attract residents to live and work in downtown Detroit. The People Mover is an elevated system that operates in a nearly 3 mile loop around downtown, and the QLINE light rail links the People Mover to the Detroit Amtrak Station.
- Total Population820,072
- Male Population(47.5 %) 389,565
- Female Population(52.5 %) 430,507
- Median Age37.00
- Average Household Income$44,229
- Median Household Income$25,062
- Median Income Under 25$13,903
- Median Income 25-44$22,628
- Median Income 45-64$29,123
- Median Income Over 65$26,611
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