By Ryan Brittain, Colliers
Speculative construction has always carried a certain boldness in industrial real estate. Building without a tenant can either signal visionary thinking or a bold bet on future demand.
In metro Detroit, that confidence was on full display during the post-COVID boom. To meet the surge in tenant demand, highly respected industrial developers raced to deliver modern distribution space across the region. At the height, preleasing was not always necessary but often occurred. Developers pushed forward on new Class A warehouses, confident that tenant requirements would catch up and, for a time, they did.
Yet here we are in 2026, and speculative development is not an idea of the past. It is returning, this time with more discipline.
This is not another Resurgit cineribus Detroit comeback story, but rather a thoughtful recalibration. The “Return of the Spec” reflects a market that has matured and learned, not one that has overheated.
To understand it today, it helps to revisit how we arrived.
As a wave of newly completed speculative projects delivered (at one point, the market saw 12 million square feet under construction), availability expanded. Shortly thereafter, the automotive industry hit an uncertain patch in late 2023. Vacancy naturally moved higher, space took longer to lease, and in some cases, pro formas that once felt safe were missed. Leasing activity cooled from record levels, interest rates climbed and capital grew more selective.
Vacancy rose from historic lows not because demand vanished, but because new supply arrived faster than absorption could digest it.
The last 3 million square feet of spec space from that cycle, which developers toiled to lease from 2023 onward, is finally gone, and one could count the number of new starts since on one hand. Groundbreakings have slowed compared with the frenzied pace of prior years. Rising capital costs and more stringent underwriting have created a natural filter. However, speculative construction has not disappeared; it has simply become more selective.
Higher borrowing costs have reshaped speculative development more than anything else. Debt is more expensive, equity is more cautious and lenders provide less favorable terms. This has changed who builds and where they build.
Institutional groups that are well-capitalized are still pursuing speculative projects, but with tighter underwriting and a much deeper focus on location and lower land basis. A marginal site or a fringe submarket is usually not a viable project.
Unlike other Midwest markets, metro Detroit already had a high barrier to entry given the geographic constraint of having water along its entire eastern edge, and that barrier has now risen even higher. These constraints preserve opportunity for disciplined developers.
Projects on the horizon
Yes, there are fewer starts, but there is higher conviction in those that are coming. In the first half of this year, companies including NorthPoint Development, Ashley Capital and Flint Development are anticipated to build spec Class A distribution space in proximity to Detroit Metro Airport. JB Donaldson, D’Agostini Cos. and others are expected to build smaller, adaptable light industrial spec space in high-end suburban markets, with additional developers likely to follow.
Automotive suppliers, which have been unusually quiet for the past 24 months, have been recalibrating around what next-generation automotive will look like and how it will be powered. The pent-up demand is palpable.
Metro Detroit’s industrial identity remains closely tied to automotive and advanced manufacturing. As electric vehicle platforms, battery technology and supplier networks evolve, the region continues to generate industrial requirements that blend logistics and manufacturing.
Speculative buildings are being adapted accordingly. Developers are designing higher electrical capacity, thicker floors capable of heavier loads, crane footings and layouts that can accommodate both distribution and manufacturing or assembly-related uses. The distinction between warehouse and manufacturing space in this market continues to blur, and new speculative product reflects that reality. A building capable of serving multiple use types reduces downtime risk and widens the tenant pool in a more measured leasing environment.
Developers are increasingly targeting buildings in the smaller 100,000 to 300,000-square-foot range rather than defaulting to 500,000 square feet or larger. These sizes align with current tenant demand, which is not necessarily driven by larger national groups but instead includes regional operators and advanced manufacturers seeking flexibility. This is what a maturing cycle looks like and feels like.
Today’s spec projects are typically located in proven logistics corridors such as the Airport, I-275, Macomb County and Northern I-75. Many are thoughtfully designed so that they can be adapted and split for shallow or mid-bay users.
Metro Detroit’s fundamentals, including cross-border trade with Canada (the Gordie Howe International Bridge is coming online this year), a deep manufacturing base and extensive infrastructure, remain strong. If the first 45 days of the year are an accurate indication, the industrial market appears poised for continued stabilization rather than contraction. That said, for those developers courageous enough, speculative projects launched now may prove well-timed.
While significant build-to-suit deals (including data centers) have stolen headlines recently, metro Detroit is still building without tenants in hand, but now with greater precision, stronger underwriting and a clearer understanding of demand.
Spec is back, and smarter.
Ryan Brittain is a vice president with Colliers | Detroit. This article originally appeared in the February 2026 issue of Heartland Real Estate Business magazine.