Office
Office vacancy is up, but only by a smidge. How can this be, given the work-from-home phenomenon? Offices are being converted to other uses.
Major changes:
- Treystar converted street-level office space to retail, including The Desenberg event space and the upcoming Crafted Copper, a cocktail lounge and duckpin bowling experience.
- We recategorized the first-floor office space in the Kalamazoo Building to retail to reflect what we feel is the highest and best use for that space.
Key points:
- Expect more conversion of office space to other uses in the near future, especially in buildings with vacancies that cover entire floors.
- Smaller office spaces, especially space that is turn-key and includes parking, are filling up faster than larger vacancies.
Retail
The retail vacancy rate actually decreased in 2024, despite what your eyes tell you. The issue is that most of the vacancies are in key, visible locations along the Kalamazoo Mall.
Note: 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.
Major Changes:
- We removed 10,000 SF of vacant retail space with the pending demolition of 246 W Kalamazoo Avenue, which will become a parking lot for the County.
- New restaurants include Barrio and Crafted Copper. Also, we see a new sushi place coming; Wild Bull reopened; and Jungle Bird was replaced in record time by Dimi’s.
Key Points:
- The announcement of the event center will likely have a positive impact on the retail vacancy rate, especially with the addition of new bars and restaurants.
- If we want to see more browse-and-shop retail stores, however, we will need to do a better job of marketing downtown to patrons.
Residential
The residential vacancy rate is higher than it was during the pandemic (and the concurrent opening of The Exchange and 400 Rose).
Key points:
- The majority of the residential vacancies are larger, 2-bedroom units.
- Anecdotally, much of the residential growth has come from medical school students and young professionals.
