National firms putting GR on radar
Region’s economic growth should continue, but at a slower pace.
KC Conway has worked in Atlanta for the past 35 years, but he’s ready to move to Grand Rapids.
The senior vice president of SunTrust Bank said when he started working with Colliers International in Grand Rapids a few years ago, the quality of life quickly appealed to him, almost so much he’d be ready to give up his long life in Georgia.
“West Michigan is well-positioned to be a leading region in the Midwest, and I anticipate Grand Rapids and the surrounding area will be on the radar for national companies of all sizes and industries in 2017,” Conway said.
Conway presented at the 17th annual Economic and Commercial Real Estate Forecast Event, along with Grand Valley State University economist Paul Isely and a panel of Colliers advisers.
Among the topics Conway discussed was the idea the Rust Belt should be the Trust Belt, which would combine the U.S. Department of Commerce’s Bureau of Economic Analysis regions of the Great Lakes and Plains together as the Midwest, resulting in the largest region in America in terms of gross domestic product. The Southeast currently has the most states and the largest GDP of the seven current regions with $3.8 billion. Together, the Midwest would have a GDP of more than $6 billion, or more than a third of the nation’s total.
“Companies, especially international, (and) national media overlook what’s happening in the Midwest,” Conway said. “They don’t look at all the pieces going around, so when you put the Trust Belt together, that’s over 55 percent of the U.S. GDP.”
Conway said the Midwest, and West Michigan specifically, have a lot of good indicators. He also said the multifamily and industrial sectors in the U.S. will still be the most active.
Isely said the changes in West Michigan largely come from the net import of population since 2014, resulting in a need to build.
He said one of the main pieces of future development in West Michigan will be to convince potential residents they can come to the area and live on a wage $20,000 less than an alternative market and still have the same or better quality of life.
Grand Rapids’ economic growth should continue, Isely said, but somewhat slower than the previous year, which slowed down from 2015, as well.
“Employment growth will slow to about 2 percent growth from running at 3, 4, or 5 percent during the last few years,” Isely said. “Sales growth will improve to about 3 percent, but business leaders said while they see sales going up this year, they will need fewer workers to handle it.”
Conway said Pittsburgh is a larger market example of the change Grand Rapids is in the midst of making, a one-time blue-collar market switching to technology and other advanced industries.
The growth in Grand Rapids has caused a shortage of space, said Mike Murray, senior vice president of Colliers West Michigan. The area’s industrial market is at approximately 5 percent vacancy, and major retail corridors are largely full, at least in spaces suitable for national and regional retailers looking to enter the market.
“There is a lack of supply across all sectors in West Michigan, which will push many companies and developers to take advantage of space optimization,” Murray said. “West Michigan is also reaching a peak for revitalization, many retail corridors are full and there is a need to transition into building new spaces in order to keep up with strong demand.”