west michigan

2021 – Q4 Market Report

Market Overview

West Michigan comprises a 10 county region which includes Kent, Muskegon, Berrien, Cass, St. Joseph, Calhoun, Kalamazoo, 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. Grand Rapids has several notable rankings including:

Other accolades include:

  • #3 – “Top Cities Where U.S. Manufacturing is Thriving” – Grand Rapids, AdvisorSmith, 2020
  • #2 – “Top Housing Market for Millennials” – Grand Rapids, ImproveNet, 2020
  • #13 – “50 Best Places to Live in America” – Grand Rapids, Business Insider, 2020
  • #4 – “Best Cities for First-Time Home Buyers” – Grand Rapids, WalletHub, 2019
  • #2 – “Best Destination for Millenials” – Grand Rapids, The National Association of Realtors (NAR), 2019
  • #6 – “25 Best Affordable Places to Live in the U.S.”- Grand Rapids, U.S. News & World Report, 2019





Median Household Income



29% Highschool
32% Some College
32% Bach/Grad+

Total Businesses


Total Employees


Source: Esri 2021

Industrial OVerview


In all, the industrial market has not changed much from Q3 through Q4 of 2021. Inventory is still low, and we’re still seeing demand surge. This has been the story for a while now. All existing product is being leased and bought up, as tenants are fully utilizing every square foot of industrial space that they can. Develop-able industrial land is scarce and becoming a big issue, so anything shovel ready is in demand. Low vacancy rates and ongoing construction lead times and backlogs are pushing industrial projects further and further away from Grand Rapids. Outlying metro areas that were once considered “unattractive” are now seeing a bump in interest.

Grand Rapids was starting to “grow up” and get “big” even before the pandemic struck, and what comes with that is land and construction price increases. With an outside influence pouring into the city, we are entering a brand-new world in West Michigan in terms of what it will cost to build industrial properties or any property for that matter. You cannot expect to build for the same price today as you could a few years ago. Prices are staggeringly higher now than 5 years ago, and we rarely see pre-engineered metal buildings with costs under $70/ft. It is not unusual to see $100/sf when it used to be $30-$60/sf. Lumber and steel prices have seen historical highs in the last 18 months, which is still below the national average but not by as large of a margin as it used to be. This is the new normal. We won’t be seeing a huge correction, the market will never return to the pre-pandemic market levels.

So how are industrial businesses and developers going to deal with this? The ones who wait will lose; big companies that regularly build are looking to move forward because prices are expected to continue to increase. This was not COVID-driven – this was happening beforehand. Grand Rapids has historically been a cheap market for construction. A whole host of factors have led to this. COVID mostly affected supply chains and material availability. It added fuel to the fire but didn’t start it. So, act now while you can and continue to update budgets for the long run.


  • Two million square feet
    available for lease, and
    739,875 square feet
    currently for sale.

  • Upwards pressure on used
    building price because
    new construction is too
    expensive. The current
    lead time for steel is 48-52
    weeks out.

  • Land values increasing,
    some acres of land are
    going for $60000 to
    $70000 an acre, almost
    double what it’s ever been


Source: CoStar


Source: CoStar


Industrial Transactions

Source: CoStar

Office Overview


While predictions for how the office market would shake out globally have varied across the board, one thing everyone can agree on is Grand Rapids has remained relatively unscathed and sheltered from the social unrest due to the pandemic. There is a large amount of deal velocity happening right now in West Michigan, and while some tenants have turned to the suburbs for various reasons, many nationwide companies have decided to call downtown Grand Rapids their new home.

Rates have held particularly steady in Class A and B downtown office buildings. In the city of Grand Rapids, the average asking price of a lease rate was $17.74 per square foot. However, on average it has been 11% below the listing price, with a reported lease rate of $13.50 per square foot and is on market for an average of 243 days.

There are several large regional and national companies that have trailblazed the way for business success in Grand Rapids. There is also a significant amount of expansion, consolidation, lease extensions, and new companies that have moved to the central business district this quarter. Companies that have found longtime success being headquartered in Grand Rapids include Spectrum Health, Varnum, Rhoades McKee, Miller
Johnson, Warner Norcross, and BofA to name a few.

Varnum LLP and Spectrum Health, two of the companies with a large office presence in downtown Grand Rapids, are starting to consolidate their corporate headquarters. Varnum has committed to being downtown for at least the next 10 years, and while they have downsized to 63,000 square feet, they still will be occupying four floors at Bridgewater Place. They are planning a large-scale renovation and are taking lessons learned throughout the pandemic to create an up-to-date work environment to meet the needs of its workforce and better serve its clients. Spectrum Health is in the process of building an 8-story office building on the north end of downtown and will continue to provide services and support to the West Michigan community. Spectrum Health has started to vacate its old offices and has begun buying and leasing out its own properties. They currently have 26 office space leases in place, and their goal is to have 1200 to 1500 employees working in the new building, which is expected to be completed by summer 2023.

The new players in town who are following in the footsteps of the trailblazers after seeing their success include Perrigo, Acrisure, MCP, RDV Corporation, Mercy Health Saint Mary’s, and the new Meijer Innovation Center. Perrigo, the leading provider of affordable self-care products, has made the decision to build their new North American headquarters on
the Medical Mile of Grand Rapids. Joining Michigan State University’s Innovation Park, they will be adding to a network of strong academic, medical, and health care delivery partners uniting to transform the health industry. In addition, construction is closing on Acrisure’s new $30 million headquarter in the central business district, becoming Studio Park’s largest tenant. Approximately 500 employees began working there in August, with room for around 100 more when completed. All Acrisure’s West Michigan insurance brokers will now be working together under one roof.

As a result of some of these users downsizing and consolidating, Grand Rapids is finally starting to see a “reshuffling of the deck” in the city. The giveback from these larger companies is leaving plenty of opportunity for up-and-coming new companies who focus on tech, logistics, staffing, medical, and other sectors. As businesses figure out their long-term plans as a result of Covid-19 and a ramp up in technology, they are finding out they don’t need as much of a footprint in today’s hybrid work environment.


  • Currently 2.9 million
    square feet for lease, and
    1.1 million square feet for
    sale in Grand Rapids.
  • Cap rates are leveling out
    and starting to increase
    once again. At the
    midpoint of this year, it fell
    to under 8.7% from 10%
    at the start of 2021. They
    now are hovering around
    9.0% and are predicted to
    slightly increase by end of
    the year.
  • Rents anticipated to
    decrease in order to
    compete with present
    and future sublease space,
    along with the at home

average of west michigan asking rent & vacancy

Average of West Michigan asking rent and vacancy

Source: CoStar

average of west michigan absorption trends

Average of West Michigan absorption trends

Source: CoStar

Average of West Michigan Sales Transactions Volume ($)

Source: CoStar

Retail Overview


Confidence in retail is rising, and people are finally getting out and enjoying life once again. While there are some ongoing disruptions in the industry right now, the future holds many positive projections. But with the current supply chain bottlenecks, the big question is: how will the upcoming holiday season perform?

With the state of Michigan changing its rules on cannabis with the social equity plan, more categories are being added for small startup growers and sellers of medical/recreational marijuana. This market is starting to catch investors’ attention, with big companies starting to make acquisitions, which in turn is competing with the industrial sector for space. But none the less, once a disjointed market, and arguably still is to some degree, is starting to finally see less expensive properties and a growing submarket.

Grand Rapids continues to expand exponentially with medical research, high quality jobs, and skilled college graduates who are here to stay. And because of the sophisticated, strong financial base of West Michigan, national retailers like Total Wine & More and Whole Foods have decided to make the move to Grand Rapids. Total Wine & More opened its first Michigan location in Grand Rapids earlier this year. The 34,000 square foot retailer at 4923 28th St. SE hosts up to 8,000 different wines, 3,500 beers, and 3,000 spirits. Employing upwards of 50 new team members, they will be given 100 hours of training on beer, spirits, and wine before they even start working. They will be offering full-time positions with competitive wages and full benefits, including a 401(k), health and dental insurance, paid leave, and assistance for secondary education. By end of 2021, Total Wine & More plans on opening three new locations in Ann Arbor, Novi, and Sterling Heights.

Whole Foods has signed a lease to open a store in Kentwood at the Radcliff Plaza, near the Woodland Mall. While the store is currently in development, there is currently no timeline for when it will be completed. Landing a Whole Foods in any particular market is a great accomplishment in the retail industry, as this will open the doors for new retailers in the area because of the heavy foot traffic and excitement this big box retailer generates.

Although the retail industry is making a comeback, retail properties are on the market longer than some of the other property types such as office. In Grand Rapids, retail properties are listed and on the market for an average of 498 days. These are usually smaller box spaces though; big box retail does not stay vacant as long and has a quick turnover rate. For the whole market, the average asking price for lease is currently $14.34 a square foot, but actual lease price is higher, sitting at an average of $14.89 a square foot.

Retail in West Michigan is somewhat flux relative, and Grand Rapids has needed more rooftops and a larger corporate presence in the downtown area for urban retail to thrive. After decades of recruitment efforts, there are now three large corporate users relocating headquarters into downtown Grand Rapids. Between Acrisure, Perrigo, and Spectrum, new corporate employees will be adding to the activity in downtown Grand Rapids over the next couple of years. Combined with new residential units either under construction or planned for the downtown Grand Rapids area, we will be entering an exciting new era in urban retail.


  • With a labor shortage in
    an economy where jobs
    vacancies are plentiful and
    the people to fill them
    are scarce because of the
    conditions, workers are
    finding themselves with
    much more leverage.
  • 78% of sales volume
    comes from National
    companies, while 21%
    comes from local
    companies with the
    remaining 1% coming
    from foreign companies.
  • Holiday retail sales are
    likely to increase between
    7% and 9% in 2021,
    according to Deloitte’s
    annual holiday retail forecast.

average of west michigan asking rent & vacancy

Average of West Michigan asking rent and vacancy

Source: CoStar

average of west michigan absorption trends

Source: CoStar

average of west michigan sales transaction volume ($)

average of west michigan sales transaction volume

Source: CoStar

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