Grand River Growth Plan -All Gibbs for City Jan 2 2026 - Flipbook - Page 80
Summary of New Office Potential
The sources of new office development potential are as follows:
•
Pent-Up Demand: Current vacancy rates suggest there may be existing demand in the market
for new office space to satisfy natural or equilibrium vacant space needs.
•
Anticipated Employment Growth: The City of Farmington Hills is projected to add around 400 –
600 office workers annually. Assuming 150 sf of space needed to support each new office
worker, the City of Farmington Hills could see new office development equals roughly 60,000 to
90,000 sf.
Functional Obsolescence: The last factor in the demand potential for new office space is the annual
functional obsolescence and re-tasking of 1- and 2-Star buildings, which currently supply approximately 2
million sf of office space in the Farmington Hills / Farmington submarket. An annual functional
obsolescence rate ranging from 1.00% to 1.33% is used, representing an average building useful life of
between 75 and 100 years.
This depletion rate is used to estimate the amount of space which is removed from the marketplace. The
report estimates approximately 30,000 sf of 1- and 2-Star office space being worn-out or re-purposed in
the submarket annually.
Figure 20: Grand River Ave. looking northwest toward Middlebelt Road.
Fundamental demand for office space is closely tied to broader employment trends, especially in
finance, professional services and information-intensive fields. While remote work soared during the
pandemic, many companies are gradually returning to offices or adopting hybrid models to attract talent
in a tight labor market.
Projected job growth in office-heavy sectors remains the key driver of future demand. Nationally, ample
existing inventory softens overall development, yet new construction still appears in high-growth areas
and through build-to-suit projects. Despite the remote-work shift, well-positioned and amenity-rich
office spaces can still command strong rents and low vacancies.
Grand River Corridor Office Market Analysis
Gibbs Planning Group
July 2, 2025
16.
