Economic Overview
The Detroit metro area remained relatively stable through Q3 2026 despite a challenging economic environment, with unemployment up 70 basis points (bps) year-over-year (YOY) to 5.4%. Nonfarm employment held steady at 2.0 million jobs, down 3,200 jobs YOY. Industrial-using sectors declined in August 2026, with manufacturing employment down 1.1% YOY and trade, transportation and utilities down 0.3% YOY.
Supply and Demand
Overall industrial vacancy within the Detroit market increased by 30 bps YOY to 3.8 %, though it decreased by 30 bps quarter-over-quarter (QOQ). Among all property types, the office service segment recorded the largest increase in vacancy, up 130 bps YOY to 7.6%. At the submarket level, four of the 11 tracked submarkets reported a YOY decrease in vacancy, falling by an average of 30 bps. The remaining seven submarkets recorded increases, rising by an average of 80 bps.
After four consecutive quarters of negative absorption, Q3 2026 net absorption turned positive, totaling 2.0 million square feet (msf) and lifting the year-to-date (YTD) total to 485,000 square feet (sf). Occupancy gains were driven largely by move-ins in the Western Wayne submarket, led by Renaissance Global Logistics, which occupied its 500,000-sf space at 38481 Huron River Drive West, and Morgan Foods, which occupied its 462,000-sf space at 17991 Wahrman Road. New leasing activity accelerated in Q3 2026, bringing the YTD total to 6.6 msf, up 36.0% YOY. Growth was largely driven by big-box demand, with eight new deals of 250,000 sf and greater, compared with just three during the same period last year. New leasing activity is an indicator of future quarterly net absorption.
Detroit's industrial development pipeline remained extremely active through Q3 2026, with 1.4 msf of new industrial space delivered YTD, and an additional 3.2 msf under construction. Build-to-suit (BTS) projects accounted for 69.0% of YTD deliveries, with speculative developments accounting for 72.0% of space under construction.
Pricing
The overall average net asking rental rate continued to increase, up 2.5% YOY to $7.40 per square foot (psf). Five of 11 submarkets reported YOY asking rent growth, led by Livingston (+10.4% to $9.67 psf) and Macomb North (+9.5% to $6.75 psf).
