The metro Milwaukee area's office real estate vacancy rate continued to rise through the end of 2024, reaching a new high of 19.8%, according to the latest quarterly report from the
Commercial Association of Realtors Wisconsin (CARW).
The rate was up from 18.6% in the third quarter and up from 17.7% in the same time in 2023.
In a sign of further softening, the market had negative absorption of more than 311,000 square feet of office space in the fourth quarter, bringing negative absorption in 2024 to more than 944,000 square feet.
This comes after the market rebounded slightly in the third quarter, posting about 30,000 square feet of positive absorption.
As the office market adjusts to users' post-pandemic preferences, office space brokers report a continued "flight to quality" trend of users opting for higher quality — albeit smaller — office spaces.
This was reflected in fourth-quarter data with Milwaukee's central business district reporting positive absorption of about 14,000 square feet of class A office space and negative absorption of about 250,000 square feet of class B office space, which was mostly a result of Johnson Controls
officially vacating its downtown Milwaukee office.
In the suburbs, which posted a four quarter office space vacancy rate of 20.6%, class A, B and C properties all saw negative absorption of a combined 73,000 square feet, the report shows.
Fourth quarter office market data by submarket (vacancy/absorption):
Downtown Milwaukee East: 18% / -234,752 sf
Downtown Milwaukee West: 19.2% / -15,743 sf
Third Ward-Walker's Point: 20.3% / +12,615 sf
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Brookfield: 22.6% / +34,542 sf
Mayfair-Wauwatosa: 28.1% / -74,718 sf
Mequon-Theinsville: 16.8% / +3,523 sf
Milwaukee Central: 1.2% / 0 sf
Milwaukee North Shore: 14% / +2,130 sf
Milwaukee Northwest: 25.7% / -83,638 sf
Milwaukee South: 7.7% / -10,598 sf
Milwaukee-West Allis: 29.7% / -27,823 sf
Pewaukee: 22.4% / -305 sf
Waukesha Northwest-Lake Country: 5.5% / +16,235 sf
Waukesha Southeast-New Berlin: 30% / +38,469 sf
Waukesha Southwest: 6.1% / +33,183 sf
