The retail business was among the many hardest hit by COVID-19 restrictions and shutdowns, however West Michigan’s industrial actual property sector is displaying indicators of restoration and creating optimism amongst consultants.
“Retailers are starting to really feel cautiously optimistic in regards to the coming months as we’re seeing indicators of a rebound,” Earl Clements, senior vice chairman at Colliers Worldwide’s West Michigan workplace, mentioned in an announcement. “Retailers and eating places labored exhausting to adapt throughout COVID-19, and so they proceed to take action resulting in processes and practices that may seemingly stick round post-pandemic.”
The primary quarter of 2021 confirmed a 5.1 p.c emptiness price for Grand Rapids retail house, a slight lower from the earlier quarter, in line with a latest Colliers market pattern report. The emptiness price may begin “creeping again up” barely as landlords attempt to recoup hire they’d beforehand abated, in line with the report.
Colliers advisers noticed tenants lively in lots of segments, together with grocery, house items, furnishings and residential enchancment. Extra exercise is linked to medical-related tenants, health and eating places with and with out drive-thrus.
Some strip mall facilities are additionally seeing extra exercise than they had been pre-pandemic, mentioned Jeff Tucker, senior managing director of brokerage and principal at Bradley Co. Whereas retailers have seen some job displacement all through the pandemic, the sector is coming again, Tucker mentioned, together with with some small field retail expansions.
“Restaurant exercise is growing considerably, particularly those which have been much less impacted by COVID-19 as a result of they’ve been in a position to capitalize on take-out operations or drive-thrus,” Tucker mentioned.
Regardless of a latest surge in COVID-19 circumstances, Gov. Gretchen Whitmer has not issued new lockdown restrictions akin to orders in 2020. Some eating places have chosen to shut voluntarily as Michigan leads the nation in charges of latest COVID-19 circumstances.
Industrial continues to thrive
In the meantime, the commercial sector continues to be a shiny spot for the actual property market, each all through the pandemic and within the first quarter of 2021. Emptiness charges are at 1.68 p.c statewide amid excessive demand and tight provides, in line with Colliers’ market report, which notes building prices stay excessive and rates of interest are low.
“Industrial provide continues to lag behind demand, and there’s been virtually no speculative constructing,” mentioned Julie O’Brien, vice chairman at Colliers Worldwide’s West Michigan places of work. “We now have companies that need to develop however are remaining cautious within the present market. We’ll proceed to see the emptiness price to lower, which means extra competitors for these rising corporations, like e-commerce.”
Optimistic about workplace
Grand Rapids’ workplace market continues to be in a “wait and see” mode with a emptiness price at almost 9.59 p.c, which is predicted to extend based mostly on Colliers’ market forecast.
“The workplace sector has actually been a problem all through the COVID-19 pandemic, however we’re optimistic that the administration of vaccines and the itemizing of restrictions on in-person working will influence workplace attendance,” mentioned Scott Morgan, senior vice chairman at Colliers’ West Michigan workplace. “Whereas it’s unsure whether or not huge strikes can be made within the workplace sector this yr, we all know corporations can be searching for new and completely different areas transferring ahead to accommodate social distancing.”
Whereas in-person workplace work continues to be down, “the long run is shiny” for the Grand Rapids workplace market, mentioned Chip Bowling, senior adviser and principal at Bradley Co.
“Particular to the West Michigan workplace market, shopper morale is up,” Bowling mentioned. “Shopper confidence is up, workplace brokerage is up, execution of leases is up. Some companies are discovering consolation in house places of work for workers, however different companies are realizing they want their individuals again within the workplace greater than ever.”
