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According to The Detroit News, a number of high-profile businesses have leased office space in the city, to the detriment of the office market in the surrounding suburbs.
Last week online life insurance brokerage MyInsuranceExpert.com was among the businesses which have decided to move downtown. The online company is to move its headquarters and 85 employees to office space in downtown Detroit.
John DeGroot, Vice President of Research in the Southfield office of Grubb & Ellis Co., a commercial real estate advisory firm, told the news portal: “I can’t recall such a situation like this in my career when the momentum is clearly in favor.
“It’s too soon, really, to say how long the impact will be other than to say that the central business district is going be much more competitive with the suburbs. And that’s really not a bad thing.”
Other companies to make the move to downtown are Blue Cross Blue Shield and DTE Energy. Blue Cross Blue Shield is moving 10,000 of its employees from its office building in the suburbs to downtown.
Maureen Donohue Krauss, Oakland County’s Director of Economic Development and Community Affairs told The Detroit News: “I don’t think it creates an overt battle between Detroit and the suburbs, but, yes, the moves really hurt because so much office space is become available in a short span.”
Meanwhile, consumer spending in the US in July beat all predictions according to Bloomberg, as purchases rose by 0.8 percent. And deliveries at Detroit-based General Motors rose by 7.6 per cent on the previous year.
Editor’s notes: In the first quarter of 2023, the Metro Detroit office market vacancy rate climbed 1.1 per cent to 20.7 per cent during the first quarter of 2023, which was an 8-year high.
The Southfield, Troy and Farmington Hills office submarkets took the brunt of downsizing efforts by occupiers. These three submarkets alone added over 1 million square feet of available space to the market during the first quarter of 2023.
Myinsuranceexpert.com had been based in office space in Troy but as of July 2023, was not trading.
See Offices to Rent in Troy here
In July 2023, Blue Cross Blue Shield did not list a Detroit office address on its website.
In the same month, DTE Energy (which is an abbreviation of Detroit Edison) listed One Energy Plaza as its headquarters. The Downtown Detroit complex is made up of three buildings – the Walker-Cisler Building, the General Office Building, and the Service Building.