Michigan commercial market gets Warren Buffett boost

Warren Buffett is bringing money and education to metro Detroit to boost commercial growth.

Entrepreneurs and other business owners in the Detroit metro area will have some big-name help in the future, as renowned investor Warren Buffett announced the investment of $20 million in loans, education and mentorship programs to small businesses there. 

The funds are part of a $500 million national Goldman Sachs initiative for which he is co-chairman. The metropolitan area's commercial real estate market will likely see some change as a result, as successful businesses will see a need for new spaces.

"You've got a lot of able people in small businesses," Buffett said, "but they often have one or two aspects of it that they don't understand so well. One of our most popular classes in the curriculum is negotiations. A lot of us had no experience with that when we started out."

The 10,000 Small Businesses program was introduced in New York City in 2010 and later was offered in Chicago, Cleveland, Houston, Los Angeles, Miami, New Orleans, Philadelphia, Salt Lake City and Long Beach, Calif., USA Today reported. Other states are getting monetary help but not educational or support services: Kentucky, Montana, Oregon, Tennessee, Virginia and Washington.

"In Detroit, the opportunity for small-business growth is compelling, as the city transitions from a challenging period in its storied history toward a brighter future," Goldman Sachs CEO Lloyd Blankfein said in an email statement, USA Today reported.

Diversity in Detroit
The Motor City's commercial real estate market is seeing a healthy pace of activity this year, according to a market trends report from Colliers International. Vacancy rates are dropping in most submarkets, especially in downtown Detroit, where they dipped 3 percent.

Total office inventory in metro Detroit at the end of the first quarter of 2013 was about 209 million square feet in 10,620 buildings, according to the report. Year-to-date absorption at the end of 2013's first quarter was 56,721 square feet, compared to more than 504 million at the end of the fourth quarter last year.

Some of the major moves in the city include upcoming construction of a 278,000-square-foot Faurecia North America headquarters in Auburn Hills, which is scheduled to break ground soon. Another large project is the $100 million redevelopment project in Novi that is to include a major hotel chain, offices and a medical center, Colliers International reported.

The region's automotive industry also is expanding production to meet increased demand and the healthcare industry continues to grow and absorb space in well-known buildings.

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