Office space rents during the fourth quarter of 2006 changed little in the metro Milwaukee area, according to a recent report by Boston-based Colliers International.
Meanwhile, office space rents are rising in the rest of the country.
During the quarter, downtown class A office space rents in Milwaukee were about $22.00 per square foot, a zero-percent change from a year ago, according to the Colliers report. However, Milwaukee’s average downtown class A office space rent is still higher than rents in several cities including Atlanta ($21.86 per square foot), Cincinnati ($21.78), Phoenix ($21.43), Nashville ($20.87), St. Louis ($20.58), Kansas City ($20.53), Cleveland ($20.31) and Indianapolis ($19.41), according to the report.
The highest downtown class A office space rent in the nation is $79.57 per square foot in Midtown Manhattan, and the lowest is in Little Rock, Ark., at $14.75 per square foot.
Suburban class A office space rents in the Milwaukee area were $21.00 per square foot during the fourth quarter, also unchanged from a year ago, according to the report. Milwaukee’s average suburban class A office space rents exceeded rents in some metro areas including Nashville ($20.04 per square foot), Cincinnati ($19.80), Charlotte ($19.71) and Indianapolis ($19.25), according to the report.
The highest suburban class A office space rent in the nation is $35.88 per square foot in the San Diego area, and the lowest is in the Boise, Idaho, area at $16.24 per square foot, according to the report.
In Chicago, downtown office rents were $36.00 per square foot in the fourth quarter, up 5.9 percent from a year ago, and suburban office rents were $22.27 per square foot, down 5.7 percent from a year ago.
Most metro areas, unlike Milwaukee, are seeing rental rates for office space increase, according to the Colliers report. The national average for office space rents during the fourth quarter was $41.01 per square foot for downtown office space and $25.84 for suburban office space, according to the report. Nationally, downtown rents were up 18.2 percent and suburban rents were up 7.5 percent for the year.
"The story of Q4 was, without question, rents," said Ross Moore, senior vice president and director of market and economic research at Colliers International. The company’s Milwaukee affiliate is Colliers Barry Inc. "Our forecast for 2006 entailed a 10 percent increase in downtown rents and a 5 percent increase in suburban rents. We were considered bullish, but now with 2006 behind us, we were obviously too conservative. For 2007, we’ll see more of the same. As tenants rush to secure space before vacancies drop even more, downtown rents are anticipated to rise another 12 to 15 percent, and suburban rents another five to seven percent before the year is out. Rent spikes will again occur in a handful of markets."
