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11Colliers International

recently is Advantage Sales and Marketing, who moved           SURVEY OF EXPECTED 2018 LEASING ACTIVITY
nearly 400 employees out of 56 Grandville Avenue SW
downtown into the former Klingman’s Furniture building on      ULI’s Emerging Trends in Real Estate 2018
28th Street SW.
                                                                                   Technology    82.0                                             17.3
The Atrium Building at 3351 Claystone Street SE underwent        Advertising & marketing         74.2
a major renovation in 2017, and saw SalesPad expand                                              65.8                                             22.1  3.7
into a new 30,000-square-foot space after taking an                                Health care   61.2
ownership interest in the building. They moved out of                               Coworking    56.6                                  34.2
approximately 17,000 square feet on the East Beltline.                            Life sciences  49.6
Additionally, First Companies announced the purchase              Media & entertainment          45.9                                  38.8
of four acres to continue to expand their Heritage Pointe      Nonprofits & associations         42.9
office campus on East Paris Avenue near Cascade Road.                                             38.5                            43.4
We expect to see the medical office market continue to                                   Finance  30.1
expand and grow in 2018.                                                              Insurance  28.4                            50.4
                                                                                     Education   21.2
                                                                 Accounting & consulting         7.2 54.0                47.4                           6.7
                                                                           Energy & utilities    5.2 64.1
                                                                                      Law firms                          53.1                           4.0
                                                                                                                         52.0                           9.6






                                                                                  0% 20%                            40%          60%         80%        100%

                                                                                                           Growing       Stable        Shrinking

                                                               Most industries expect to see growth or at least stability in real estate leas-
                                                               ing in 2018, with the technology sector not surprisingly leading the way.

Employment trends continue to be positive. Unemployment        TOP AREAS OF EMPLOYMENT
reached a resistance point around 3 percent and has
bounced back up slightly, however most economists              Source: The Right Place
consider 3 percent to be “full employment”. Labor
participation in Kent County is over 70 percent, compared      DESCRIPTION                                                       MSA              WEST
to a national average of 62.8 percent. These numbers                                                                                              MICHIGAN
show that not only does our region have among the lowest       Office and Admin Support Occupations                              80,572           105,011
unemployment in the nation, but that we have among the                                                                                            99,394
highest amount of people trying to find work as well. Both      Production Occupations                                            73,739           74,826
signs of a very healthy economy.                                                                                                                  59,430
                                                               Sales and Related Occupations                                     54,909           58,553
We predicted the downtown market would feel pressure                                                                                              43,120
around $20 per square foot (Modified Gross) in 2017,            Transportation/Material Moving Occupations                        47,984           41,278
however we are seeing that being tested and expect                                                                                                39,279
2018 to see many office spaces, especially downtown,            Food preparation/Serving Related Occupations                      42,982           30,514
break through that number.                                                                                                                        28,571
                                                               Education, Training, and Library Occupations                      30,885

                                                               Management Occupations                                            30,580

                                                               Healthcare Practitioners/Technical Occupations                    30,605

                                                               Installation, and Maintenance, and Repair Occupations 21,956

                                                               Business and financial Operations Occupations                     23,561

                                                               VACANCY RATE

                                                               Source: Colliers International | West Michigan Research Department

Many tenants have decided to exercise renewal options          29%
rather than relocate due to recent increases in market rates.  25%
With the cost of construction still high and demand for        21%
modern spaces pent-up, we expect rental rates to remain        17%
firm in the near-term.                                          13%

In 2018, we see the office market continuing to grow and        9%           2008                 2010           2012      2013         2015             2017
attract business. Parking will continue to be a concern        5%                                          Combined      Suburban
downtown, while the suburbs will look to take advantage
of this trend. Drawing talent back to the region is also              2007
paramount in 2018. Companies will look to create work
environments that help grow and retain the best talent.                                          Downtown
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