West Michigan

2021 – Q2 Market Report

Market Overview

West Michigan is a ten-county region comprised of Kent, Muskegon, Berrien, Cass, St. Joseph, Calhoun, Kalamazoo, Van Buren, Allegan, and Ottawa countieszoo, Van Buren, Allegan, and Ottawa. Grand Rapids is the second largest city in the state and has been experiencing extensive growth over the past decade with over 200,000 residents within the city limits.

Grand Rapids has a long history of furniture manufacturing, dating back to the 1800s. Today, West Michigan is a manufacturing hub which includes not just furniture, but automotive, medical devices, food processing, aerospace, and defense. The region has over 141,315 manufacturing jobs and 2,452 manufacturers. AdvisorSmith ranked Grand Rapids third on their 2020 list of “Top Cities Where U.S. Manufacturing is Thriving”. Major employers in the manufacturing sector include: Gentex Corporation (5,800), Amway (3,791), Herman Miller, Inc. (3,621), Perrigo (3,500), Steelcase,
Inc. (3,500), Lacks Enterprises (3,000), Arconic (2,350), Roskam Baking Co. (2,090), Haworth Inc. (2,000), Wolverine Worldwide, Inc. (1,500), GE Aviation (1,100), Bissell, Inc. (600), and The Kellogg Company (992).

Healthcare is also a major economic driver in the region. Spectrum Health is headquartered in Grand Rapids and is West Michigan’s largest employer with 25,000+ employees. Spectrum has several world class facilities in Grand Rapids including the Meijer Heart Center, Lemmen-Holton Cancer Pavilion, Spectrum Health Cancer Pavilion, Spectrum Health Helen DeVos Children’s Hospital, and Butterworth Hospital, a level 1 trauma center. The stretch of Michigan Street in downtown Grand Rapids is known as the Medical Mile. Several medical research and life science facilities are located here, drawing medical talent to the area and spurring residential and retail growth. The internationally recognized Van Andel Institute is the second highest endowed medical research facility in the country. Because of all the research facilities in the area, Michigan State University moved its medical school to Grand Rapids from Lansing in 2010. Other medical systems in the region include Mercy Health Saint Mary’s (8,500), Metro Health Hospital (2,100), and Metron Integrated Health Systems (700).

In addition to manufacturing and healthcare, other major employers include retail, education, finance, and insurance. Some of the major employers in these sectors include: Meijer (10,340), Gordon Food Service (5,000), Farmers Insurance Group (3,500), Grand Valley State University (3,300), Fifth Third Bank (2,062), SpartanNash (2,000), Independent Bank (800), Calvin University (797), and Gerber Life Insurance Company (569).

Grand Rapids is sometimes referred to as Beer City USA as it boasts more than 40 craft breweries in the metro area. The entire region is home to over 80 breweries, distilleries, and meaderies. Two of the country’s top breweries are located in West Michigan: Bell’s in Kalamazoo and Founders in Grand Rapids. Breweries support the tourism industry, bringing thousands of people each year to West Michigan. Kent County alone attracted over 94,000 people to its breweries in 2019 with an estimated economic impact of $38.5 million. The entire region is a draw for tourists due to the numerous lake shore cities and towns, campgrounds and RV parks, and a myriad of attractions. The total revenue collected from state and local taxes is approximately $440 million. Grand Rapids / Kent County has a 5.3% share of all tourism spending for the state of Michigan.

West Michigan is vibrant and growing, bringing in new residents every year. The lakeshore appeals to previous city dwellers while Grand Rapids’ growth has been fueled by millennials who are attracted to the city’s culture, job prospects and quality of life. According to a study in 2019 by The National Association of Realtors (NAR), Grand Rapids is ranked the second best destination in the country for millennials. Grand Rapids has several other notable rankings as well, including three from U.S. News and World Report: the 13th “Best Place to Live”, 6th “Best Place to Retire”, and the 6th “Most Affordable Place to live”. Financial technology company SmartAsset ranked Grand Rapids number one on their list of “Best Places to Buy a First Home”.





Median Household Income



29% High School
32% Some College
32% Bach/Grad+

Total Businesses


Total Employees


Source: Esri 2021

Industrial OVerview


The industrial sector of West Michigan continues to see strong growth, which is the basis for positive expectations for the future of the industrial sector. This is due to the increased amount of e-commerce traffic which is resulting in the creation of new warehousing and distribution facilities. Along with new companies moving, West Michigan has a famously strong manufacturing sector, and also yields some of the biggest distributors in the world like Amazon, Coca-Cola, and PepsiCo.

Vacancy rates in West Michigan are extremely low at 4.5% and have remained the same per quarter since Q3 2020. West Michigan’s vacancy rate is nearly half of what the national average is, which has been experiencing downward rates and now has fallen to 9.9%. Q2 2021 saw a positive net absorption of 6,000 square feet, and while West Michigan did not have a big quarter in terms of net absorption, this was the third highest quarterly net absorption nationally in over five years. While rents have increased by 0.8% this quarter nationally, West Michigan’s decreased by 1.20% from Q1 2021. The asking rents have fallen to an average of $3.40 a square foot, but effective rent is only $3.14 a square foot.¹

Existing building rent and lease rates are expected to rise in the future, especially for smaller users due to new construction becoming more expensive. There is a lack of inventory on the market and “hot” spaces in the range of 40,000-50,000 square feet are being sold within weeks or even days of hitting the market. In some cases, these spaces don’t even get a chance to hit the market.

According to The Right Place Inc, employers have been reporting stable or even increasing sales despite the shortage in workers and supply chain problems. Of the 118 companies the staff visited, 80% said their sales were stable or increasing, while 60% said they plan on expanding through capital investment, and more than 90% of the region said the competitiveness in the region is good or very good. Talent recruitment and retention remains a key challenge, along with bottlenecked supply chains.²

A Detroit-based developer recently acquired three former industrial properties near downtown Grand Rapids, with a mixed-use plan to redevelop the former Sligh Furniture Co. building. Sturgeon Bay Partners recently acquired 188 Wealthy Street SW, 190 Wealthy Street SW, and 440 Grandville Avenue SW for a total of $5.3 million. The plans include 753 apartment units mixed with retail and commercial space.³

A Sparta-based pallet racking/storage company is investing $65 million to expand into Walker. The Michigan Economic Development Corporation says their new facility will be at 3060 South Industrial Drive NW in Walker; this expansion will bring more than 160 new jobs to the area. The company employs nearly 300 people in Michigan between its three locations and will likely expand more in the future to meet the growing needs of the ever-changing e-commerce industry.⁴


• Construction for development is currently delayed by 48-52 weeks. Workers in the industry do not expect to see construction costs decrease.

• There is a lack of inventory for purchase in general, so rent is very high, especially for smaller users.

• There’s a multitude of new development happening in Southwest Michigan. New companies are being fueled by e-commerce and warehousing.


  1.  Moody’s Analytics / Reis
  2. MBiz: Survey: West Mich. industrial economy facing ongoing supply chain challenges
  3. MiBiz: Developer acquires three more properties for massive Sligh factory mixed-use project
  4. Grand Rapids Business Journal: Speedrack plans
    $65M expansion in Walker – Grand Rapids Business Journal


Source: Moody’s Analytics / REIS


Source: Moody’s Analytics / REIS


Source: Real Capital Analytics

Office Overview


Despite the ongoing pandemic, both downtown and suburban office markets of West Michigan continue to see robust activity. When the virus began to spread, it was challenging to predict how the office market would shake out over the next 12–18-month leasing cycle. While experts predicted a decrease in real estate transactions and negative absorption rates due to social unrest, Grand Rapids and West Michigan remained relatively insulated from these predictions in the office market. There is a large amount of unforeseen growth and increases in square footage needs of companies such as logistics, mortgage, the entire mental and physical health industry, recruiting firms, and new start-up companies specializing in bacterial disinfectant services.

Overall, the Downtown Grand Rapids’ Office Market continues to experience positive momentum. Some companies are seeking to relocate from their downtown locations in favor of the suburbs. In addition West Michigan is seeing an increase in sublease office space becoming available as a direct result of companies’ decision makers realizing their employees may “work from home” and be productive at the same time. West Michigan is becoming the new home for growing companies who realize the opportunity that both the downtown market and sublease market has to offer. Sublease office space is quickly being absorbed by companies committing to long term leases (5-7 years) and in return are experiencing the benefits such as furniture inclusion, rent abatements, subsidized tenant improvement dollars, and rental rates $2.00-$4.00 below standard market rents. These tenants are therefore able to spend dollars upgrading their overall work environment by way of improved signage, building quality and location. Historically, the competitive available sublease market had a negative impact on lease rates and lease concessions and made it difficult for landlords to compete without decreasing their asking rates. Surprisingly, we did not see that happen as a result of limited quality options available for lease on the direct market, thus allowing landlords to hold strong on their asking rates.

The suburban office market is experiencing an uptick in activity resulting in positive absorption and increased rental rates. Just as there are tenants who seek the benefits of being located downtown, there are also those (Post COVID) who have re-prioritized the importance of being close to their homes. Free on-site parking, reduced crowds and having direct access from their parking lot into their suite thus eliminating crowded elevators as part of their daily commute add to the appeal of a suburban office location. Many members of our work force continue to juggle the demands of their jobs and family obligations, including the stop/start of potential school closures, remote learning and available childcare, which we believe to be a driver behind this trend.

So, what’s happening inside the offices and their layouts? Office layouts have begun to change in the market as well, while cubicles will still exist in some offices, they’re getting larger and may include higher walls. Private offices and or team rooms instead of open floor plans that have dominated for the last several years are preferred and are beginning to make a comeback. Employee safety and confidence in the work environment will likely continue to drive this trend.


• Roughly 60% of downtown Grand Rapids businesses have returned to in-person office work according to Downtown Grand Rapids Inc.

• It is expected that established companies will sublet their class A space to current class B and C tenants, creating a hardship for class B and C space.

• According to REIS, vacancy rates in West Michigan for Q2 2021 are at 22.70%, which is above the national average at 18.7%, and above the historical high of 19.7%during the savings and loan crisis.

• Sublet space continues to trickle in and compete with landlords for tenants, attributed to the future heading more towards the hybrid work environment.


  1. Moody’s Analytics / Reis
  2. MBiz: Born from a merger, Spectrum Health grows into major health care player
  3. MiBiz: Office workers gradually return to downtowns as officials forecast a new landscape
  4. MiBiz: Branch acquisitions to expand Horizon Bank’s Michigan reach


Source: Moody’s Analytics / REIS


Source: Moody’s Analytics / REIS


Source: Real Capital Analytics

Retail Overview


West Michigan is seeing many new businesses, startups, and creative uses for new and old spaces in the retail market. As confidence in the West Michigan retail sector continues to improve, the market is seeing purchases of retail investment grade properties with lower cap rates driven by the strong stock market. The biggest square footage demand in the market for retailers is in the 1,200-2,500 square feet range, but there are still big box retailers who are moving into large spaces at reduced prices. There is also an increase in creativity in filling vacant spaces. We are seeing an increase in medical, educational and entertainment tenants in previously retail only locations.

Like most areas of the country, vacancy rates vary significantly throughout West Michigan, depending on the area and the quality of the retail project. For example, in Grand Rapids, the vacancy of 28th Street Southeast is under 6%, while the Plainfield and Northland Drive area tops 9%. Overall, however, retail traffic and sales are increasing and we anticipate a continued increase in leasing activity. Asking rental rates vary as well. For example, the overall asking rate for 28th Street Southeast is near $14.00, but increases significantly closer to Woodland Mall and I-96. The highest asking rate is found on East Beltline near Knapp Street exceeding $21.00. In some specialty areas with new construction, such as Bryon Center Avenue and M-6, near Metropolitan Hospital, rates are now exceeding $30.00 per square-foot.

Brick and mortar retail real estate is more resilient than most people had forecast and we expect retail rental rates to rise about 5% next year in the A and B+ locations as vacancies decrease. Retail sales and traffic is rebounding with some stores approaching pre-pandemic levels. Outside of Grand Rapids, retail growth in most areas will be slower but still positive.

Most of the restaurants in West Michigan that have drive thrus have had banner years, setting sales records. Many full service restaurants and quick service restaurants (QSR) without drive-thrus are seeing more traffic and expecting the trend to continue. The sales still have a way to go before owners are feeling comfortable, but most are optimistic.

Cities that have opted in early to recreational cannabis are seeing growth in the economy, new jobs, an increase in applications, and a stronger tax base. The cannabis industry is also key to helping reinvest and jump-start projects in areas that were declining and completely transform them. Areas that are zoned for cannabis tend to be followed by high prices for real estate around it.

The cannabis industry has loaded the southwest region of Michigan with many new developments, including a new 22,000 square-foot grow operation in Battle Creek. Niles and Buchanan have already exceeded a total investment of $50 million in the past two years and have gained around 250 new jobs each. The Southwestern region of Michigan has been a hot commodity for cannabis investors.¹ Most cities that are willing to work with them are finding a significant increase in tax revenues. Many municipalities that originally voted against cannabis operations are now reconsidering.


• There is still strong demand for camping and sporting goods stores, as there is a desire to be outside.

• Nationally, malls and restaurants are struggling to keep up with expenses and the lack of workers. A quarter of all malls may close which could add 135 million vacant square feet.

• Grocery retailers continue to be strong performers amidst the pandemic.


  1. Moody’s Analytics / Reis
  2. MBiz: Communities early to opt in see economic development benefits of recreational cannabis
  3. MSN.com: Marijuana boom brings jobs and new life to factories, storefronts in southwest Michigan


Source: Moody’s Analytics / REIS


Source: Moody’s Analytics / REIS


Source: Real Capital Analytics

Building Partnerships,

Improving Communities,

Changing Lives.

Bradley Company commercial real estate brand logo monogram stylized letter B

Live 2024 Popup All Services Lead Gen
Please select your primary region of business