I’ve been following the real estate market in downtown Kalamazoo for over 10 years, measuring the vacancy levels every March by surveying property owners and visually inspecting properties. While some may disagree with one aspect or another of my methodology, I use consistent standards so that we can track the trends over time. This consistency is what makes it a useful study.
The office vacancy rate went down. What happened to the office-pocalypse? The answer: 135,000+ square feet of office came off the market, primarily due to the expansion of Bronson (we don’t count government or institutional properties) and the conversion of office space to residential.
- PlazaCorp is converting 85,000+ square feet of office space to residential.
- Treystar is renovating the former CharterOne Bank building for Barrio Tacos.
- Several buildings saw the addition of new businesses, particularly the Haymarket and the Kalamazoo Building.
- While vacancy rates remain high, asking rental rates have not dropped, especially for the smaller-format office suites.
- Over half of the office vacancies are in just six buildings, and most of that is in suites larger than 10,000 square feet.
- Building owners who solve the parking issue seem to be faring better than those who ignore it.
In this study, retail includes retail stores, salons, and restaurants, but not banks or other first-floor office users. A large chunk of downtown’s retail space is along the Kalamazoo Mall.
Some key points include:
- We finally moved the Entertainment District (Wild Bull, Monaco Bay, et al) to vacant, which caused an increase in the retail vacancy rate.
- This study does not include the pending loss of V&A Bootery, a 5,800 SF storefront, or Food Dance, which Larry Bell will be redeveloping at some point.
- In addition to Barrio Tacos, Treystar is working on exciting plans for the first-floor space along East Michigan. Stay tuned.
- Four new restaurants are officially in the works that we know of: Barrio, Berries, Bobcat Bonnie’s, and Toba Sushi.
Again, the market added 100+ for-rent units with no sign that the market is over-saturated. New units are finding success by adding amenities like club rooms, workout facilities, and rooftop decks.
- PlazaCorp is adding 80 or so units to the Arcadia Buildings and 21 units at the Exchange.
- If the event center breaks ground, expect them to add more units to property they own at the west end of downtown.