According to Grubb & Ellis/Paramount, one of the region’s largest commercial real estate firms, planned retail projects will add nearly 2.5 million square feet of space to the market this year and into 2005.
“Retail is the shining star of the real estate market. While leasing has slowed slightly, site sales and development are as strong as ever,” said Bill Bussey, a retail specialist and vice president of Grubb & Ellis/Paramount.
Bussey said West Michigan continues to appeal to national and regional chains, which have been moving into the area for the past few years, because of demographics. A growing population with a young median age (33) and above-average median income ($51,287) are tied to a region with a low cost of living index, a combination that appeals to merchandise sellers and food servers.
DSW Shoes, Home Depot, Old Navy, the Atlanta Bread Co., Red Robin, Costco and Kohl’s are a few of the businesses either coming to the region or expanding current stores this year. Meijer, Target and Best Buy also are building new stores along the Lakeshore.
In the region’s prime retail locations, vacancy rates are running under 5 percent, a number the office and industrial segments would love to have.
The 2004 Real Estate Forecast from Grubb & Ellis/Paramount predicts the industrial sector will continue its recovery from the manufacturing downturn the market experienced last year.
Smaller users and build-to-suit opportunities should help the market recover. The larger properties, with leases in place, should sell for top dollar, while vacant space should go at big discounts.
The downtown office market should be able to fill some ground-floor space, as new restaurants should open downtown over the next few years. But the East Paris and East Beltline office markets are projected to remain the strongest in the Grand Rapids area, while downtown Holland also is expected to do well.
The investment market will continue to demonstrate high levels of interest and strong demand this year, even though there is a limited supply of inventory in the region. Low interest rates make it more attractive to own than lease, but owner-occupied buildings have increased pressure by taking properties off the market.
For a free copy of the 2004 Real Estate Forecast, either call Grubb & Ellis/Paramount at 774-3500 or e-mail a request to firstname.lastname@example.org.