Grand Rapids, MI (July 18, 2022) – Advantage Commercial Real Estate Services announces the release of their Q2 Market Trends Report which provides an overview of what their commercial real estate experts are seeing across the West Michigan market.
West Michigan is still dealing with record high inflation, labor shortages and record low inventory across the market. Q2 brought some interesting changes to the industrial, office, retail, investment, and land sectors and what will happen the remainder of this year is still in question.
INDUSTRIAL
- Continued supply chain disruptions both locally and nationally are rising, record high inflation is still limiting the type of product that can be ordered and produced, and record low vacancy continues to plague manufacturers desiring the expansion of their operations.
- Current conditions show that the industrial market is still adjusting amid the erratic supply chain and substantial labor shortages.
- We expect to see sales volume plateau, but we have yet to determine how much the rapidly changing economy will affect the local industrial market.
OFFICE
- Companies with greater collaboration are no longer fully remote and companies that have been hybrid or completely remote are ready to experience the benefits that come along with going into the office.
- The West Side of Grand Rapids has particularly gained interest from office users looking to grow locally. Future growth patterns, planned developments, and ample on-site parking are just a few of the many amenities attracting businesses to the area.
- Lease rates have remained consistent and there should be very little change throughout the immediate quarter.
RETAIL
- Throughout Q2, big-box stores struggled to keep shelves stocked due to continued supply chain and logistic issues. They were also met with record high inflation.
- Despite the challenges that every West Michigan based retailer is facing, activity in downtown Grand Rapids increased in Q2, likely linked to employers bringing employees back to the office.
- Given the validity of West Michigan, national retailers and restaurants want to grow within our market. This is challenging as there is very little inventory along Main and Main.
INVESTMENT
- Inflation, interest rates, stock market volatility, and cap rates have been the topic of conversation between investors. Inflation increased even more in Q2, with interest rates following close behind, in hopes of curbing the inflationary market.
- Investors still have cash, demand continues to be strong, supporting current real estate prices. By utilizing this cash to purchase assets, investors can ignore interest rate hikes, while simultaneously hedging against inflation.
- In Q3 we expect investors to lead with caution, but demand to remain high. Many investors are holding their properties and we expect this to remain for the foreseeable future.
LAND
- At the end of Q2 land investments increased significantly and one of the main reasons for this is its increased value of land in recent years.
- Industrial land is currently the most sought after property type. Limited supply available, along with ideal amenities, such as utilities and zoning continues to make the search for industrial land challenging.
- The desire to purchase land that is zoned for retail developments is purely demographic and traffic driven. With limited sites available, retail users are waiting for the right locations throughout Main and Main, in hopes of repurposing space or demolishing an existing building for land to develop.
- In Q2, there was a slow down in land sales intended for the development of office space. This decrease in land sales is still a result of instability from the pandemic.
- Multifamily is proving to be one of the most valuable land types post-pandemic. As the local community grows, there is a great need to provide more living spaces to the region, creating high demand for land that meets all building requirements.
The full Advantage Commercial Real Estate Second Quarter Market Trend Report can be found here.
For media interview requests, including advisors to share regular updates on commercial real estate industry trends, contact Callie Simon at Callie.Simon@AdvantageCRE.com. To learn more about Advantage Commercial Real Estate Services LLC, visit AdvantageCRE.com.###
Advantage Commercial Real Estate houses the best, brightest, and most experienced commercial real estate advisors in West Michigan that specialize in industrial, office, retail, investment, land, and multifamily sectors. Our in-house marketing and research professionals.
