The metro Milwaukee area’s industrial real estate market absorbed 1.3 million square feet of space during the third quarter, one of the five highest absorption rates in the nation, according to Cassidy Turley‘s third quarter industrial report.
Cassidy Turley’s Milwaukee affiliate is Cassidy Turley Barry.
Only Dallas (2.9 million square feet), Detroit (2.1 million square feet), Chicago (1.4 million square feet) and Dayton, Ohio (1.4 million square feet), had higher industrial space absorption rates in the third quarter.
The Milwaukee area’s 7.6 percent industrial space vacancy rate is significantly lower than the U.S. industrial space vacancy rate of 9.2 percent in the third quarter, according to the Cassidy Turley report.
If industrial space absorption and vacancy trends continue more industrial real estate development could occur eventually in the area, said James T. Barry III, president of Cassidy Turley Barry.
“It’s too early to be (overly) optimistic,” he said. “I certainly think the trends are moving in the right direction. If those trends continue we are going to see shortages of certain types of space in some geographic areas. We are seeing some (building) additions and new construction for owner occupants. We haven’t seen much of any spec development. I still think that’s a ways off.”
Industrial space rental rates in Milwaukee dipped in the second quarter by 2 percent to $4.43 per square foot. More absorption and higher occupancy levels could put upward pressure on lease rates and sales prices for industrial buildings, Barry said.
“We have absorbed most of the distressed industrial real estate (in the area),” he said. “There are still a few bargains left, but there is not anywhere near as many as there had been.”
Nationally, the industrial real estate market has posted six consecutive quarters of positive absorption and declining vacancy.
