Retail V Michigan

Colliers forecast: Chances for recession in West Michigan are slim

Colliers forecast: Chances for recession in West Michigan are slim,ph01
Photo courtesy Lormax Stern Development

A recession coming to West Michigan in 2019? Not likely, said the real estate and economic experts who spoke at the 19th annual west Michigan Economic & Commercial Real Estate Forecast held Jan. 31 by Colliers International|West Michigan.

The experts at the event, held at DeVos Place in Grand Rapids, Michigan, in conjunction with the Seidman College of Business at Grand Valley State University, said that the West Michigan region should continue on a path of steady growth this year, despite challenges.

“We are looking forward to another positive year for West Michigan,” said Duke Suwyn, chief executive officer of Colliers International|West Michigan. “Recessions come in all shapes and sizes, but we don’t anticipate one impacting West Michigan this year.”

Suwyn said that the West Michigan region continues to create jobs, local businesses are still growing and large-scale multi-use projects dot the area. These trends, Suwyn said, point to steady growth in 2019.

One good sign cited at the forecast? The steady growth of the Gerald R. Ford Airport in Grand Rapids.

“West Michigan continues to be a hub for business, innovation and distribution, and that’s reflected in the growth of our airport,” said Alex Peric, chief operating officer of Gerald R. Ford Airport.

Peric said that the number of passengers who fly through the airport rises each year. He said that this is a trend he doesn’t expect to slow in 2019.

Some of the other good news from the forecast? West Michigan’s industrial sector has reached a historically low vacancy rate of just under 5 percent. Third-party logistics companies are also flocking to the region, including Same Day Delivery, which leased space at 3378 3 Mile Road, and Surface Logistics, which leased 74,000 square feet at 5738 Eagle Drive.

Forecast speakers said, too, that retailers are becoming more creative and are successfully finding the right mix of tenants. A good example is the Knapp’s Crossing development on East Beltline in Grand Rapids, which features a mix of wellness and health businesses. This mixed-use development remains busy with such tenants as Orangetheory Fitness, Clean Juice Organic Juice Bar, Neurocore and Woodhouse Day Spa.

The multifamily market is also a strong one, with forecasters saying that between 2017 and 2018 apartment sales made up one-third of all investment sales in West Michigan, accounting for $141 million in sales. There is plenty of new construction in this sector, too, with six low-income housing developments expected to break ground in the region in 2019.