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Region finds itself in landlord market

The West Michigan commercial real estate market has been at a standstill recently.

For several years, landlords have been benefiting from limited vacancies within the region, leaving tenants with less commercial space.

“In general, it has been a landlord market since the (stock market crash) recovery really took hold, so probably the last five to seven years,” said Jeffrey Hainer, Colliers International West Michigan senior research analyst.

He said West Michigan recovered quicker and better than most cities because commercial space has become limited, and desirable locations and buildings are difficult to find.

As a result, landlords can dictate lease negotiations by selecting their preferred tenants and offer fewer concessions, according to Hainer.

The landlord-favored market is derived from construction costs.

“Construction costs are so high that new products aren’t being built as much as they should be. Therefore, existing landlords are benefiting from that, as well,” Hainer said. “If construction costs start to come down, it will definitely even things, but we don’t see that happening in the future.”

In 2017, Hainer said Colliers completed 359 leasing transactions, 22 more than 2016.

The commercial market is broken up into different sectors, such as office, industrial and retail.

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