The office market is showing early signs of stabilization as obsolete inventory is removed, sublease space declines, and tenants increasingly prioritize high-quality, well-located buildings. While challenges remain, particularly in older properties, leasing activity and owner-occupier interest are helping rebalance the market.
Vacancy in the office market held steady at 22.4%, as small gains in the East, North, South, and West Submarkets helped offset larger move-outs in the CBD. Total absorption landed near zero (-1,088 SF), but key leases—including Deloitte (25,000 SF) and Spicer Group (16,000 SF)—signaled renewed activity. As hybrid work stabilizes, flexible lease terms and shorter commitments are redefining how landlords engage with tenants and investors assess assets.
The Greater Lansing office market saw a slight uptick in vacancy to 21.9% in H2 2024, with CBD properties continuing to lag behind suburban assets. Leasing volume remained steady, though transaction values declined as companies downsized and favored shorter-term leases.
Smaller occupiers account for the bulk of leasing activity while tenant-friendly market conditions are expected to persist throughout 2024.
Slowdown in Leasing Activity Pushes Vacancy to 20-Year High
The average market vacancy rate remained flat, increasing 2 basis points over H2 2022 figures and 1 basis point over H1 2022 numbers, suggesting a new “normal.”