As the economy took a dive during the fourth quarter of 2008, more office space in the Milwaukee area was vacated, according to a pair of new office market reports
According to Boston-based Colliers International, whose local affiliate is Colliers Barry, the downtown Milwaukee office space vacancy rate rose from 15.9 percent in the third quarter to 17.5 percent in the fourth quarter. The class A office space vacancy rate downtown rose from 9.6 percent in the third quarter to 12.6 percent in the fourth quarter.
In the suburbs, the office space vacancy rate rose from 15.0 percent in the third quarter to 16.4 percent in the fourth quarter. The class A office space vacancy rate in the suburbs rose from 12.1 percent in the third quarter to 12.4 percent in the fourth quarter.
The newest office market report from Milwaukee-based Inland Companies shows even higher levels of office space vacancy in the region. The Milwaukee area’s office space vacancy rate rose from 16.6 percent in the third quarter to 16.9 percent in the fourth quarter, according to Inland, and the class A vacancy rate rose from 12.0 percent in the third quarter to 12.4 percent in the fourth quarter. Downtown, the office space vacancy rate held steady at 19.5 percent in the third quarter, while the class A vacancy rate rose slightly from 11.7 percent in the third quarter to 11.8 percent in the fourth quarter.
The Milwaukee area’s office market had a negative absorption of 84,354 square feet during the fourth quarter and had a negative absorption of 59,214 square feet for all of 2008, according to the Inland report.
The downtown office market had a better year than the suburban market, according to the Inland report. The downtown submarkets had positive absorption of 53,409 square feet of office space in 2008, while the suburbs had a negative absorption of 112,623 square feet of space.
The brightest spot for the office market in 2008 was the downtown west submarket, which had positive absorption of 97,316 square feet. Most of that can be attributed to leases at the Reuss Federal Plaza building and the Boiler House building at the former Pabst brewery complex, the Inland report said.
"With most of the local layoffs hitting in the fourth quarter of 2008 and continued instability on a national level, do not expect the Milwaukee office market to rebound quickly in 2009," the Inland report said. "However, with little construction underway and good activity in the first month of the year, the Milwaukee office market should begin to stabilize by the end of 2009."
