Why one number cannot answer this question
Two suites of identical size in the same county can differ by 70 percent in rate, and both can be correctly priced. Rent is set by what the space does, not by square footage.
The six things that actually set the rate
1. Lease structure. The biggest source of confusion. Triple net quotes look cheaper and are not comparable to modified gross until you add the pass-throughs. See Triple Net vs Modified Gross vs Gross.
2. Finished office component. Finished, conditioned office costs far more per square foot to build and maintain than open warehouse. A suite at 20 percent finished office carries that cost in the rate.
3. Suite size. Smaller suites cost more per square foot. Doors, restrooms, HVAC, management overhead and leasing cost are largely fixed per suite and spread across fewer square feet. This is why small-bay consistently prices above bulk.
4. Clear height and loading. Taller clear height means more usable capacity per square foot of floor. Dock-high loading is scarce in small-bay and prices accordingly.
5. Submarket scarcity. The one tenants underestimate. A submarket with almost no small-bay stock prices above an established industrial corridor with plenty of it, for a physically similar building.
6. Amenities that are not the warehouse. A glass storefront, 24/7 access, surveillance, free overnight vehicle parking and a professional address are real costs and real value, if you use them. If you do not, you are paying for them anyway.
A worked example, using our own published rates
$11.95/SF/YR MG — Rankin Business Park, Troy. 1,287–10,000 SF, 16'–18' clear, 14' grade-level doors, dock-high in select suites, 288 parking spaces, established Oakland County industrial corridor with I-75 access. The lowest rate of the three, because it is a working industrial park in an industrial market, and because the suites are larger on average.
$17/SF/YR MG — Z Novi Commons, Novi. 1,475–2,800 SF, 15' ceilings, 10' drive-in doors, roughly 20 percent finished office, glass storefront, 24/7 access, surveillance, free overnight company vehicle parking. Higher, because roughly a fifth of what you lease is finished office, and because the storefront turns the suite into a place customers can come.
$20/SF/YR MG — Northville Research Center. 1,600–5,800 SF, 16' clear, 12' drive-in doors, retail-style storefronts on Seven Mile. The highest of the three, driven by scarcity: Northville has almost no small-bay industrial stock and effectively no new supply. You are paying for location and frontage, not a better warehouse.
- The practical read: if your operation never sees a visitor and you do not need finished office, the Troy rate is your number. If customers come to you, or your staff live in western Wayne and southern Oakland, the premium may be worth it. Work that out before you tour.
How to compare two quotes honestly
- For each, get: base rent per SF, lease structure, estimated additional rent per SF, last year's actual reconciliation, whether utilities are separate, what the office share is, and what buildout is included. Then compare total occupancy cost per square foot. Anything less is comparing two different things.
A note on published market averages
Market-wide asking rate averages for Metro Detroit are dominated by large-format distribution space, which is a different product from small-bay. A regional average drawn from buildings of 100,000+ square feet will read well below what any small-bay suite leases for, and a tenant who anchors on that number will conclude every small-bay quote is inflated. It is not. It is a different market.
- When citing market figures, name the source and the quarter. Estimates vary by firm and by whether they measure vacancy or availability. For regional conditions see our Metro Detroit Industrial Market Conditions guide.
Frequently asked questions
How much is warehouse space per square foot in Metro Detroit?
It depends on structure, size, office share, clear height, loading and submarket. Our published rates are $11.95, $17 and $20 per square foot per year, all modified gross.
Why is small warehouse space more expensive per square foot?
Fixed per-suite costs spread across fewer square feet.
Is modified gross more expensive than triple net?
The headline number usually is. The total often is not.
What other costs should I budget?
Utilities, your own insurance, any tenant improvement share, moving, racking and equipment, permits, and a security deposit of typically one to two months.
Do rates include CAM?
Under modified gross, more is bundled in than under triple net. Ask for a complete occupancy cost breakdown for the specific suite. See What Is CAM in an Industrial Lease?.