GRAND RAPIDS, Mich.-- Another hurdle was passed in a project for downtown Grand Rapids. A 14-story, two tower building at 150 Ottawa will have office, retail and apartment space.
It's just one of multiple new developments downtown, which begs the question: "Do we need it?" The short answer is "yes."
"We're starting to resemble cities more like Minneapolis-St. Paul or maybe even like some of the more prosperous West Coast cities that have really been doing well and getting a lot of redevelopment activity," said Mark Bjelland, professor of geography at Calvin College.
Bjelland says Grand Rapids is in a boom phase, meaning it's on the rise. Businesses want to be downtown and so do millennials.
"The millennials don't want to be driving from the suburbs. It's not what they want," said David Wiener, senior vice president of Colliers International. "They want a collaborative, really cool work space and they want it close to where they live."
Wiener says office space has been harder and harder to come by over the past six years. In 2010, downtown had a 25% vacancy rate. Today, it's at just 9.5%
"The trend continues to be positive," said Wiener. "We're seeing new buildings. We're seeing proposed new buildings. We're seeing cranes in the air and we see that continuing."
But how do they gauge how much space they need and when does the building stop? Wiener says Grand Rapids doesn't have a lot of speculative space, meaning they don't build what isn't needed.
"We're seeing small increments of positive absorption space getting absorbed into the market," said Wiener. "There aren't developers out there that are going to do a 400,000-square foot speculative building."
As far as residential space, Wiener says the more businesses that come to Grand Rapids, the more places we need for their employees.
"When businesses locate down here, it makes the people want to locate down here," said Wiener. "It's a nice building process."
Grand Rapids was recently on a list from Forbes showing the highest increase in the cost of living: up 10% in just the past year. Experts say one of the benefits to over-building residential space is those rental rates will hopefully go down a bit.