The Milwaukee area industrial real estate market’s strong performance of recent years continued during the second quarter with 813,406 square feet of positive absorption, while the vacancy rate dipped from 6.71 percent to 6.05 percent, according to the latest report from Xceligent and the Commercial Association of Realtors Wisconsin.
During the last year the area’s industrial market has absorbed nearly 4.5 million square feet of space. The vacancy rate has fallen from 7.23 percent a year ago.
The biggest industrial deals of the quarter was Joy Globals lease of 305,065 square feet of space in Oak Creek and Junco’s $1.5 million purchased of a 202,592-square-foot building at 2800 W. Custer Ave., Milwaukee.
Second quarter industrial market performance by county:
– Milwaukee: 380,106 square feet of absorption, 8.9 percent vacancy
– Kenosha: 378,595 square feet, 4.2 percent
– Sheboygan: 101,100 square feet, 4.3 percent
– Ozaukee: 39,446 square feet, 8.3 percent
– Racine: 33,679 square feet, 4.5 percent
– Washington: 28,892 square feet, 4.7 percent
– Walworth: 28,000 square feet, 3.4 percent
– Waukesha: -176,412 square feet, 4.0 percent
There is currently 6.3 million square feet of industrial space under construction in the area, including 5.6 million square feet of new construction, according to the Xceligent and CARW report. Of the 5.6 million, 4.5 million is build-to-suit or owner occupied and the remaining 1.1 million is speculative construction.
“New construction is breaking loose in the southeastern Wisconsin industrial markets,” said Jeff Hoffman, vice president of Pewaukee-based Judson & Associates, in his second quarter Wisconsin industrial market update. “General contractors focused on industrial work are indicating that their backlog is as strong as it has been since 2007. Expect more new construction announcements in the news.”
Waukesha County had its first industrial space negative absorption since the Great Recession.
“Expect this to be short lived,” said Hoffman, who pointed out that the data was “heavily influenced” by the addition of 287,950 square feet coming online from vacated former American TV distribution centers. “There are several deals in the pipeline for what remains of the existing inventory.”
