There’s an important continuity among monthly Ann Arbor / Ypsilanti breakfest presentations that add a great deal of value to and beyond any given topic. [1,2]
As part of introducing the three persons empaneled to discuss our “Local real estate outlook for 2020,” chamber Executive Vice President Andy LaBarre, note that he’d prepared his questions for facilitation during then still unfolding international events of potential relevance. The salient point is that he had in fact, prepared.
Extensively. As usual. Beyond topics and range of perspectives in speaker selection, A2Y Early Editions are actively guided to maximize value for attendees.
Given the audience, two of the three speakers were involved in commercial real estate; the third in residential. Agent Nick Zagar with CARR Commercial spoke first, solo, as sponsor. He was then joined by Mike Jurgenson, partner and managing broker with Swisher Commercial, and Mike McGee, listing partner with Kathy Toth & Team – Keller Williams Reality. [3-8]
Beginning with the commercial perspective, Mr Jurgenson noted that vacancy rates have declined over the last ten years — “since the last recesssion, to a point where it’s a bit concerning. Businesses don’t have options like they did.”
The current market is “tight,” meaning “fewer, smaller concessions,” added Mr Zagar.
It’s nice to see additional construction. I’ve also seen a couple of structures go up with no tenants booked in advance, which is good to see. They filled right up. This could support the saying, ‘If you build it, they will come.’ [9]
To this, Mr McGee summarized the residential front for last year as one of a “definite slow down, particularly when compared to ‘boom years.'” He substantiated this by citing statistics finding sales down by 2.4% at an average 4.5% increased price for 2019. Going forward, he anticipates a “stable” 2020 market in Washtenaw County overall. [10,11]
Mr LaBarre then put a narrow focus on reginal tech sector interests, pivotal if not 800-pound gorilla here. He observed that this is “having more and more of an impact” on real estate. [12]
Mike Jurgenson proferred that this area is center to the third most important contributor to technology development in the United States, behind key areas of California and Colorado. “It’s important that we grow, provide ways to nuture it by having good space options.”
This inherently means recognizing the importance of supporting advancement of an educated skillset offering, “upgrading” ways in which we are able to continually re-educate our employee prospects base. “They have a big challenge to find labor, particularly in these times of three percent unemployment.” [13-17]
Specific to working spaces, “open, for higher densities. The ratio of space is no longer 250 square-feet per body; 150 square-feet is now the norm,” said Mike Zagar. [18]
We have to re-think parking. Offices used to need 3.5 spaces to support every 1000 square feet of office space in Ann Arbor. It’s now eight-plus per 1000 square-feet. That’s if they drive. Part of the reason people still prefer to work downtown, still do work downtown, is because they don’t care how they get there; they’ll take the bus.
We need better public transportaton for that, outside of the city. We need to serve townships, like Pittsfield. [19-21]
This tied back to the residential component. Fulfilling the promise of leveraging our place as a key part of the rapidly growing technology sector means catering to the lifestyle interests of its constituent members.
“We benefit from having cultural diversity,” explained Mike McGee.
That’s part of the change from the way things were when I was starting out here thirty years ago. Back then, night life was ‘sleepy.’ Now there are options, more things to do; spaces. Biking. River walks. Dexter and Chelsea and Saline are growing in ways that meet these needs.
Our ‘high’ market in 2005 dropped 38% before it hit bottom. In 2014 home owners broke even with that, and it’s risen twenty percent since then. The long term message is that the long term prospects are solid.
But the opportunities have to be viewed in appropriate context in order to see how moves by developers, residents, and public policy might best be directed to prepare for a future that results in the high-, middle-, or low-end of projections.
References
- Ann Arbor / Ypsilanti Regional Chamber (home page).
- “A2Y Chamber Early Edition Breakfast” Ann Arbor / Ypsilanti Regional Chamber.
- Nicholas Zagar (LinkedIn Profile).
- CARR (home page).
- “Michael Jurgenson” Swisher Commercial.
- Swisher Commercial (home page).
- “Mike McGee” (LinkedIn Profile).
- Keller Williams (home page).
- “If You Build It, He Will Come – Field of Dreams (1/9) Movie Clip (1989) HD” MovieClips (May 30, 2011) YouTube.
- “5 things to know about Ann Arbor’s booming housing market” Lauren Slagter (June 11, 2018) mLive.
- “2019” Ann Arbor Area Board Of Realtors.
- “The 800-Pound Gorilla” Peter Drucker (September 16, 2011) Psychology Today.
- “Saline Mayor Marl, Washtenaw County Commissioner Beeman talked priorities, concerns during ‘Coffee Hour’” Dell Deaton (December 14, 2019) Saline Journal.
- “The biggest reveals of the 2019 North American International Auto Show won’t be around when the public gets here” Dell Deaton (January 16, 2019) Saline Journal.
- “Global Manufacturers Are Hiring Employees At All Skill Levels To Help Their Saline Operations Continue To Succeed” Dell Deaton (August 2, 2018) Saline Journal.
- “Michigan Governor Took Center Stage in Detroit This Month To Detail Mobility Partnerships Already In Motion” Dell Deaton (June 21, 2018) Saline Journal.
- “‘Everybody Isn’t Cut Out for Trade Work,’ Advises Dr Rose Bellanca, Washtenaw Community College President” Dell Deaton (May 21, 2018) Saline Journal.
- Supplemental printed materials made available as part of this program by Swisher Commercial indicated a December 31, 2019 total market vacancy rate for office and flex space at 5.8% as compared to 6.4% one year ago. More particularly, flex vacancy rates are down 2.4% and office vacancies have remained flat over this period. 2019 Year-End Vacancy Report: Ann Arbor Area Office & Flex (December 31, 2019) Swisher Commercial.
- “Mackinac Policy Conference 2019, Part 3: A renewed, competitive passion for multimodal transportation” Dell Deaton (May 31, 2019) Saline Journal.
- “Autonomous Vehicles Promise to Solve Downtown Parking Problems” Dell Deaton (March 19, 2018) Saline Journal.
- “It’s Important to Understand What Being a “Smart City” Means to Saline, Part 1” Dell Deaton (April 12, 2018) Saline Journal.
