Grand River Growth Plan -All Gibbs for City Jan 2 2026 - Flipbook - Page 77
New Office Construction
Figure 16: This chart shows the construction activity for office buildings in Farmington Hills. Three metrics of construction activity
area shown which are deliveries, which is the square footage of office space coming onto the market. Demolished shows office
buildings that are razed and net deliveries that combine deliveries and demolished. Note that net deliveries will be negative at least
though Q3 of 2029. The total amount of office space in Farmington Hills will continue to shrink for the foreseeable future.
Consequently, brokers and developers are opting for build-to-suit projects with committed tenants,
ensuring a secure return on investment before breaking ground. Additionally, rising construction costs
and higher interest rates exacerbate the financial risks associated with speculative office development.
These factors force developers to seek stable, pre-leased agreements or pivot to other commercial asset
classes where demand is more predictable. The result is a limited pipeline of new office construction
projects unless they can guarantee occupancy through tenant commitments.
New Office Construction
Currently in Metro Detroit, there are only three new office buildings under construction totaling 720,000
sf. To put this low number in perspective, there is approximately 200 million square feet of existing office
space in Metro Detroit.
Overall, the average market rent in Metro Detroit for office space is $22.00 per square foot per year.
With rents at this level, construction of new office space is challenging if not impossible. The last of three
office buildings in Metro Detroit under construction is in downtown Birmingham and opens June 2026.
Not only did high rents help make the office building development a reality, but the developer also built
this building for a specific tenant, JP Morgan Chase. Downtown Birmingham has the highest office rents
in the Metro Detroit market because of its walkable downtown with shops and restaurants.
Grand River Corridor Office Market Analysis
Gibbs Planning Group
July2, 2025
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