The Class B office market — which lost a number of tenants to loft office developments around Fulton Street in the late 1990s — is now seeing activity again through mixed-use redevelopments.

The Peoples Building on Monroe Center Street, along with the Steketee’s department store, was placed in the Renaissance Zone (which receives tax-free benefits) and is undergoing a redevelopment with a targeted tenant mix of retail, office and residential users.

Some large projects are affecting the market in different ways. DeVos Place, the new 1 million-square-foot convention center, will create hospitality opportunities — like Blue Bridge Venture’s hotel development on Calder Plaza — and new retail, restaurant and residential initiatives along Monroe. “The convention center should favorably impact the office market by attracting national companies that cater to convention-related activities to locate in Grand Rapids,” says John Mundell, vice president/managing director with the Grand Rapids office of CB Richard Ellis. The project will be complete in 2004.

Grand Valley State University Cook-DeVos Center for Health and Sciences, located in Michigan Avenue’s medical corridor and bio-science sector, is the latest addition to the ever-expanding medical community in Grand Rapids. The center is under construction.

Additionally, the new $26 million, Grand Rapids Area Transportation Authority ITP station off of Grandville Avenue is another catalyst, along with the potential redevelopment of 212-216 Grandville, to spurn development south of the traditional central business district (CBD). “The area was recently re-zoned for mixed-use and should be the next hot sector for development,” Mundell says. The ITP station will be finished in 2004.

In the governmental sector, the GSA (Government Services Administration) is accepting proposals, ranging from leasing existing space to constructing new facilities, for two major office locations. Some state offices have found a home at One Monroe Center and Kent County has filled three major downtown buildings, including Calder Plaza, 82 Ionia and the new courthouse building.

The other hot sector is education as Kendall/Ferris, Grand Valley State University, Grand Rapids Community College and Western Michigan all control major buildings and chunks of land in the city. Recently, Western Michigan University and Thomas M. Cooley Law School partnered to bring the first law school to Grand Rapids.

Traditionally, development in Grand Rapids has been undertaken by home grown companies such as Rockford, Pioneer and Wolverine. “During the last 3 years we have seen the development scene become more regional and national,” Mundell says. New developers in the area include Hines Interest Limited Partnership, which partnered with Blue Bridge Ventures, and several Chicago and Detroit based developers in the retail, residential, and office markets.

Rental rates for Class A space ranges between $16 and $25 per square foot. Overall vacancy rates in the market are approximately 16 percent. “We feel that this will improve as development in the suburbs, which added more than 1 million square feet to the market, has slowed,” Mundell says of suburban office growth during the past few years.

Areas to watch in the suburbs are the Northeast Corridor along East Beltline, and the city of Grandville along 44th Street. Areas to watch in the CBD are Monroe Center and Grandville Avenue. “The Grandville Avenue area has as much — if not more potential — as North Monroe,” he says. The area is in close proximity to the Grand River, Highway 131, schools and the center city core. “Grandville Avenue is becoming an area where future development is directed,” Mundell says.


©2003 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.