Office sublet space in Detroit remains elevated
Posted By: CoStar on November 14, 2024. For more information, please click here to read the source article.
Just over 2.2 million square feet of Detroit office space is on the market for subleasing after pulling back 19% from the all-time high reached during the third quarter of 2023. The amount of sublet space has risen above 2 million square feet only a few times since the Great Recession. However, since the second half of 2022, the amount of sublet space has remained stubbornly above the 2 million square foot threshold. Since early 2007, the average quarterly sublet space available is just over 1.65 million square feet.
Some businesses allocated approximately 150 to 250 square feet of office space per worker before 2020, but hybrid and remote work has altered this calculus, with some organizations utilizing 15% to 25% less office space. While there’s no universal standard for how much space per worker companies should plan for, sufficient office space is still necessary to conduct business, foster corporate culture and develop and mentor employees. Since the beginning of 2024, office attendance has gradually increased, but it is still below typical historical usage. The Downtown Detroit Partnership reported that during October 2024, the average daily workers as a percent of the corresponding period in 2019 was at 52%.
Traditional office-using employment sectors in Detroit, such as information, financial activities and professional and business services, have experienced employment declines throughout 2024. However, the education and health service and government sectors both report annual employment gains of just under 2%.
About 27 office properties in the Detroit area currently have over 100,000 square feet of office space available, including One Campus Martius and the Penobscot Building. Campus Martius currently lists about 190,000 square feet of sublet space at an average of $17.50 per square foot.
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