The region’s retail real estate market had a rough start to the year with negative absorption of 272,363 square feet of space in the first quarter as the vacancy rate rose from 7.7 percent in the fourth quarter of 2013 to 8.32 percent, according to the latest report from Xceligent and the Commercial Association of Realtors Wisconsin.
The region’s retail market was hurt in the first quarter by the announcement that Kmart stores in Hales Corners and Greenfield and a Sears store in Racine would be closed.
However, the recent opening of the 260,000-square-foot first phase of the Mayfair Collection development in Wauwatosa should boost the region’s retail real estate market in the second quarter, said CARW president Jim Villa. Mayfair Collection tenants include Nordstrom Rack, Saks Fifth Avenue OFF 5th, Dick’s Sporting Goods, Old Navy and Ulta Beauty stores.
The largest positive absorption for the first quarter was a Hobby Lobby store moving to a 55,000-square-foot build-to-suit space in the Shoppes at Fox River development in Waukesha.
First quarter retail real estate performance by county:
– Waukesha: 6.6 percent (down from 7.5 percent), 48,990 square feet of absorption
– Walworth: 10 percent (up from 6.9 percent), 2,000 square feet
– Sheboygan: 12.8 percent (up from 12.3 percent), 618 square feet
– Washington: 6.3 percent (up from 6.6 percent), negative absorption of 1 square foot
– Kenosha: 10.5 percent (up from 9.3 percent), negative absorption of 840 square feet of space
– Ozaukee: 4.6 percent (down from 4.8 percent), negative absorption of 2,398 square feet of space
– Racine: 13.7 percent (up from 11.3 percent), negative absorption of 90,419 square feet of space
– Milwaukee: 7.8 percent vacancy rate (up from 7.5 percent a year ago), negative absorption of 230,313 square feet of space