The Milwaukee area’s office space had a 10.4 percent vacancy rate in the first quarter, up from 10.3 percent at the end of 2008 and 10.2 percent at the end of the third quarter of 2008, according to the Milwaukee office market first quarter report by Bethesda, Md.-based CoStar Group Inc.
The Milwaukee area’s office market had negative net absorption of 82,378 square feet during the first quarter, according to the report. That compares to positive net absorption of 27,171 square feet in the fourth quarter of 2008, 15,730 square feet of positive net absorption in the third quarter of 2008 and positive net absorption of 140,323 square feet of space in the second quarter of 2008, according to the report.
Tenants that have moved to large blocks of space this year include Diversified Insurance Services moving into 20,859 square feet of space at Brookfield Lakes Corporate Center IX and United Healthcare moving into 18,761 square feet of space at Brookfield Lakes Corporate Center V.
The downtown Milwaukee office market fared better than the rest of the region during the first quarter. The central business district had positive net absorption of 11,993 square feet of space in the quarter, down from 20,538 square feet in the four quarter of 2008.
The downtown east office submarket has a 10.5 percent vacancy rate and the downtown west office submarket has a 15.1 percent vacancy rate, according to the report. Class A space is in better shape downtown. The downtown east class A office submarket has a 8.3 percent vacancy rate and the downtown west class A office submarket has a 3.9 percent vacancy rate, according to CoStar.
The average quoted asking rental rate for available office space (all classes) in the Milwaukee area was $15.78 per square foot at the end of the first quarter, up 2.7 percent compared to quoted rental rates of $15.37 per square foot at the end of 2008, according to the report.
