Auto Sales Drive Detroit Industrial Sector To Historic High

Vacancy rates have plunged, and even though developers have kicked off millions of square feet, experts say that much more will be possible once rents increase.

“The metro Detroit market is essentially at full capacity,” John DeGroot, vice president of research at NGKF, tells GlobeSt.com, mostly due to the resurgence of the US auto industry, which saw sales reach 17.4 million units in 2015, topping a record set in 2000. “There are ten mega distribution facilities with at least one million square feet in the region, and each is between 95% and 100% occupancy.”

Chrysler recently moved into a newly completed 190,000-square-foot logistical center at 2860 Clark St. in the city, and four other projects there totaling over 1.2 million square feet are currently under construction, the most activity in 12 years. Crown Enterprises is building one of the largest facilities, a 500,000-square-foot distribution facility for its Universal Truckload Services. And Sakthi Automotive is building a 540,000-square-foot expansion on Fort Street.

http://www.globest.com/sites/globest...historic-high/

Best I can tell from the PDF for the slide presentation, the footprint for the proposed
Detroit Port of Entry for the Gordie Howe bridge extends between Post Street
and Campbell Street and Jefferson Avenue north of Fort Wayne and Fort Street.

The current Sakthi Automotive facility falls right within this footprint - will this
be purchased, perhaps with Canadian government funding, to be repurposed as
Port of Entry buildings?

Center Line received the largest single investment in the city's history, this according to City Manager Dennis Champine. Sodecia USA, a global Tier 1 automotive supplier, was considering leaving Center Line for a new location before the city offered it an Industrial Facilities Tax Exemption, persuading the company to stay and establish its North American headquarters there. Portions of the current Center Line campus will be demolished to make way for a 66,000 sq. ft. manufacturing facility and a 27,600 sq. ft. three-story administrative office tower.

http://www.secondwavemedia.com/metromode/devnews/AprilDevNews.aspx

Thank you, Hybridy, the link doesn't work for me, I will now have to compare Sodecia
and Sakthi. I am taking it from your post that Sakthi operations will move to Center
Line ahead of the Port of Entry construction.

Great news. Hopefully this can spread to other sectors.

Perhaps the auto industry can move closer to Silicon Valley through establishing further partnerships and collaborations. I see a manufacturing and high-tech moving closer together and there is vast potential for growth in this area. Detroit needs to seize this opportunity.

Quote:

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Originally Posted by casscorridor

Great news. Hopefully this can spread to other sectors.

Perhaps the auto industry can move closer to Silicon Valley through establishing further partnerships and collaborations. I see a manufacturing and high-tech moving closer together and there is vast potential for growth in this area. Detroit needs to seize this opportunity.

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http://www.freep.com/story/money/car...tion/84324008/

http://www.detroitnews.com/story/bus...ment/83959864/

http://www.detroitnews.com/story/bus...tion/83539314/

http://www.detroitnews.com/story/bus...ogle/84019844/

All great news until the next downturn.. which some analysts are predicting is 2-3 years away.
Not being a pessimist here but, auto sales aren't going to continue at this pace, especially as expensive as they are, as well as most employers aren't giving any raises to employees. Some are making the same wages as they were 10-12 years ago, depending on the industry they work in.
I hope the good times continue to roll, housing seems to have bounced back but, this is a very contentious election year and we'll have to wait and see if history dictates otherwise, as well as other crises that are impacting Michigan as a whole.

Quote:

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Originally Posted by Cincinnati_Kid

All great news until the next downturn.. which some analysts are predicting is 2-3 years away.
Not being a pessimist here but, auto sales aren't going to continue at this pace, especially as expensive as they are, as well as most employers aren't giving any raises to employees. Some are making the same wages as they were 10-12 years ago, depending on the industry they work in.
I hope the good times continue to roll, housing seems to have bounced back but, this is a very contentious election year and we'll have to wait and see if history dictates otherwise, as well as other crises that are impacting Michigan as a whole.

---

Another downturn is inevitable, but I think this time the Big 3 automakers [[especially GM) have really put themselves in a position to better weather the next one.

*GM's quality ratings are at their highest since at least the 70s.

*GM's finally working to bring their facilities out of 70s/80s.

*GM continues to invest in compact vehicles and will be the first automaker to sell regular production all-electric vehicles by the end of 2016.

*GM is no longer dumping their cars in rental car compnies to boost their sales numbers. All Big 3 automakes did this in the pas tot temporarily boost sales numbers, but that would also make it harder to sell new vehicles to those same customes a few years down the line with all of those lightly used vehicles now up for auction at the rent car companies. Not to mention the Big 3 automakers would deeply discount these rental car fleet vehicles [[and thus didn't make a whole lot of profit on them).

*GM's profit margins are at their highest in it history, around the 10% mark right now.

*GM's supplier relation marks are at the highest they've been in at least a decaed.

However, Chrysler [[and Ford to a much lesser extent) do concern me. Chrysler is ending pro
duction on most oftheir compact cars / sedans and only building Jeeps / Rams. And my issue with Ford is that they're again doing rental car sales dumps.

But even they aren't making nearly as many bad mistakes as before. For one, they're resisting the temptation to add a bunch of capacity that will have to be take offline a few years down the line. They're also strategically focused on moving production of their low volume vehicles to regions with lost cost of doing business [[and it shows in their UAW contracts.