(GRAND RAPIDS, MI)—Following the success of its annual Developer Day event this week, Greater Grand Rapids area economic development agency The Right Place, Inc., has published a 40-page Development Report that analyzes West Michigan’s industrial, office, retail, and housing development sectors.
“This year, we hosted over 170 developers, designers, architects, engineers, Realtors, bankers, and builders at our Developer Day events—our biggest Developer Day to date–which indicates the strong interest in the Greater Grand Rapids Market,” said Tim Mroz, Senior Vice President of Community Development, The Right Place, Inc. “2025 marks a transformative year for Greater Grand Rapids, with major projects reshaping the region and fueling new momentum. New multi-family housing aims to ease market pressure; Industrial growth continues with new tenants at the long-dormant Site 36, and the Gerald R. Ford International Airport is expanding to support rising demand. Together, these efforts signal a region that is connected, competitive, and ready for the future.”
Much of the report provides six-year trends in development in each of the development focus areas. The Right Place was able to aggregate third-party reports from data partners, including Colliers, JLL, Grand Rapids Regional Alliance of Realtors, and NAI Wisinski, as well as firsthand information gathered by the organization, to provide a more comprehensive view of the development ecosystem in the region.
“We built this report not just to provide research and education to the development community, but also to be used to spur new development in the future,” Mroz added.
The full report was recently distributed to The Right Place investors and participants at Developer Day. It can be found on the Right Place website: www.rightplace.org/
Below are summaries of the four sectors identified in the report, along with a 2025 outlook:
Office: Stabilizing Amidst Challenges
The office sector faces ongoing challenges, with the overall vacancy rate expected to increase to 13.8% by Q1 2025. Negative net absorption of 36,000 square feet was recorded in the same quarter, indicating a return of space to the market. Average asking lease rates experienced a slight drop, settling to $21.37 per square foot. No new office space was delivered during the year, and construction remained stagnant.
Industrial: Exceptionally Tight and In Demand
Grand Rapids maintained one of the lowest industrial vacancy rates in the nation, standing at 2.4% by the end of 2024, significantly below the national average of 6.8%. This tight market was driven by robust demand in key submarkets, particularly the Southeast and Southwest regions. Rising capital costs, a limited construction pipeline, and economic shifts have kept the region’s industrial market extremely tight, with strong demand persisting for the few available opportunities.
Retail Market: Stable Through Shifting Dynamics
The retail sector in Grand Rapids remained stable in 2024, navigating a mix of online and in-person experiences with a balance of stability and growth. The vacancy rate stood at 4.2% by Q1 2025, on par with the national average of 4.1%. Despite this, leasing activity remained robust, with strong year-over-year net absorption. Average asking rents experienced a marginal decrease, settling at $15.52 per square foot (NNN).
Multifamily Housing: Steady Demand with Slower Investment
The multifamily sector demonstrated continued demand. Although vacancy rates experienced a slight uptick to 5.6%, average asking rents increased to $1,466 per unit in the first quarter of 2025. Year-over-year rent growth stood at 2.8%, surpassing the national average. However, development investment in new units under construction was cut in half. This pullback may be attributed to investors seeking stability in their existing investments while anticipating a more favorable lending environment in the future.
Outlook for 2025: Anticipated Growth and Investment
Looking ahead, the Greater Grand Rapids commercial real estate market is poised for growth. The industrial sector is expected to remain strong, supported by the region’s diverse economy and talented workforce. The office market may continue to stabilize as businesses adapt to the evolving workplace dynamics. In the multifamily sector, anticipated interest rate adjustments could reinvigorate investment activity. Overall, Grand Rapids’ strategic developments and economic prosperity position it favorably for continued investment and growth in 2025.
