The Milwaukee area office real estate market posted strong results in the second quarter with 233,909 square feet of positive absorption, which helped lower the vacancy rate to 18.98 percent, according to the latest report from Xceligent and the Commercial Association of Realtors Wisconsin.
The area’s office market has absorbed 555,225 square feet of space during the last year and the vacancy rate has steadily fallen from 20.41 percent in the third quarter of 2013
The region’s class A vacancy rate is now at 13.06 percent, the class B vacancy rate is at 23.96 percent and the class C vacancy rate is at 18.21 percent, according to the report.
The downtown east office market vacancy rate is 16.15 percent and the downtown east class A office market is at 9.41 percent, according to the report.
Other notable submarket vacancy rates: downtown west, 29.39 percent; Mayfair/Wauwatosa, 22.44 percent; north shore, 24.71 percent; Third Ward/Walker’s Point, 17.95 percent; West Allis, 11.66 percent; Brookfield, 19.2 percent; Waukesha/Pewaukee, 14.3 percent.
The biggest office space lease deal in the area during the second quarter was Johnson Control’s 143,000-square-foot lease at the Renaissance Place complex in West Allis.
The most significant office building sale during the quarter was Riverview Realty Partners’ purchased of the 654,165-square-foot 411 E. Wisconsin Ave. office tower in downtown Milwaukee for $74.3 million. The building was 76.4 percent occupied at the time of the sale. Quarles & Brady LLP signed a 10-year extension of its lease for 186,000 square feet of space in the building.
NAI MLG Commercial also released its second quarter metro Milwaukee office market report. Comments in the report include: “the office market has continued to strengthen through the first half of 2014…a continued increase in activity, coupled with no new space deliveries, has led to overall positive net absorption…analysis of vacancy trends reval that the one and three year quarterly averages of the vacancy rate also continue to drop, indicating that the medium and longer term trends of declining vacancy appear intact…leasing activity increased from the previous quarter, both in terms of the number of deals +14 percent, as well as the total space leased +27 percent…as the market tightens in terms of available space, asking rates continue to gradually increase…this trend will likely continue until new space is delivered into the market.”