Chris Holman welcomes Eric Rosekrans, CCIM, Executive Vice President, Martin Commercial Properties, and Thomas Jamieson, Martin Commercial Properties, Lansing, MI.
Watch Eric, Thomas and Chris discuss Lansing’s office market facing high vacancy rates. This includes leasing trends, tenant strategies, and the future of office space in the YouTube video shared below:
This discussion is the second of three with Martin Commercial Properties team, and focuses on their Office Advisory.
These were the questions they cover in this conversation: Office Advisory:
Office vacancy remains at a 20-year high. What strategies are landlords and tenants using to adapt to shifting work models and excess space?
Smaller occupies are leading leasing activity—what types of businesses are driving this demand, and how does it shape the future of office space design?
Given recent sales in the office sector, what trends are emerging given the buyers of these buildings?
These interviews grow out of a series of three recent reports recently released by the company.
You can access them at: https://martincommercial.com/marketinsights/ .
Office ’24 Market Insights: “OFFICE ‘24 Market Insights Greater Lansing Area, Michigan | H2 2024”
The Greater Lansing Area office market experienced a slight increase in vacancy rates, reaching 21.9% in H2 2024, up from 21.2% in H1 2024. The Central Business District (CBD) continues to struggle with higher vacancy rates (27.1%) compared to suburban markets (19.8%). Absorption remained negative at -64,140 SF, although this was an improvement from the -98,661 SF recorded in H1 2024. Leasing activity was steady, but transaction values dropped by about 30% as companies opted for shorter-term leases and downsized their spaces.
No new office space was completed in H2 2024, and none is expected in the near future due to low demand and high construction costs. The largest leases in H2 2024 included HNTB (20,000 SF) and Thrun Law Firm (17,000 SF) in the East Submarket, and Cedar Creek Hospital (12,000 SF) in the South Submarket. Significant vacancies were created by Aetna Health vacating 30,000 SF and Ingenix (United Healthcare) vacating 9,500 SF in the West Submarket. The market remains tenant-friendly, with landlords scrutinizing deals involving tenant improvements due to elevated interest rates and high renovation costs.
The Greater Lansing Area encompasses over eight million square feet of leasable office space, with the CBD and East Submarket accounting for 71.9% of the market. The North Submarket saw a decrease in vacancy rates from 18.5% in H1 2024 to 11.7% in H2 2024, while the South and West Submarkets experienced increases in vacancy rates. The market is expected to continue favoring tenants through 2025 and 2026, with no new speculative construction anticipated due to ongoing economic challenges.
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About Martin Commercial Properties
Martin Commercial Properties, Inc. (Martin) is a vertically integrated commercial real estate firm with an established track record of delivering superior service and unparalleled results to clients since 1962. Their team services clients nationally, with offices in Lansing, Grand Rapids, and Tampa. Martin provides strategic advice and execution in five core lines of business including property development, brokerage services, property management, corporate services, and investment services. www.martincommercial.com.
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