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ARENA PLACE

       office

Office buildings offering amenities, quality design elements, and parking are having
little trouble attracting tenants at premium rates. Outdated and neglected buildings,

                                        however, are struggling to keep up.

DOWNTOWN                                                                 a number of indicators such as new construction starts, transaction
            At the beginning of last year, one of the biggest questions  velocity, vacancy, list/sale price differential, and investment cap
                                                                         rates – and compared them to trends we saw in major cities. By most
we posed looking forward was how the region would start to measure       accounts, the office sector has shown us that despite our smaller
up against major markets given the trajectory we were on. Was our        population, we are beginning to act like a major market.
weathering of the recession and subsequent growth a nice local story,    However, we are not at the adult table yet.
or was Grand Rapids really on its way to the national conversation?
After years of being one of the stronger performers in the low-to-                   A basic, yet meaningful indicator that helps show we are
middle market categories, we wondered how we would compare               on our way is rental rates. Rental rates are the product of a supply
when stacked up next to the likes of Chicago, Detroit, and Atlanta.      and demand equilibrium, and show where the market’s ceiling and
                                                                         floor are. Increasing top-end and submarket averages reflect growing
            To find the answer, we had to look past the differences in    space quality and tenant appetite. A year ago, we saw the downtown
physical size. Throughout the past year we tracked and reported on

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