The Milwaukee area’s office vacancy rate rose to 15.6 percent during the third quarter, up from 14.7 percent in the second quarter and 14.3 percent in the first quarter, according to new data from New York-based Reis Inc., which provides commercial real estate market information.
The Milwaukee area’s office market had a net negative absorption of 272,000 square feet during the third quarter. The Milwaukee area’s office vacancy rate is lower than the 17.1 percent Midwest average, but exceeds the 13.7 percent national average, according to Reis.
Class A office space in the Milwaukee area is faring better with a vacancy rate of 11.5 percent, up from 11.0 percent in the second quarter.
Class B and C office space in the area is struggling with an 18.8 percent vacancy rate, up from 17.6 percent in the second quarter.
Downtown Milwaukee also has more vacant office space. The downtown area has an office space vacancy rate of 14.4 percent, up from 13.0 percent in the second quarter and 12.4 percent in the first quarter, according to Reis. The vacancy rate has been rising steadily downtown since it was at 11.5 percent in the third quarter of 2007. The downtown area office market had a negative net absorption of 172,000 square feet of space during the third quarter of this year.
Other submarket office space vacancies, according to Reis are:
- Northern suburbs, 13.2 percent (up from 12.3 percent in the second quarter)
- Western Waukesha County, 13.9 percent (down from 14.0 percent)
- Greenfield/south, 15.0 percent (up from 11.8 percent)
- Wauwatosa/West Allis, 18.2 percent (up from 18.0 percent)
- Brookfield, 18.4 percent (up from 18.1 percent)
Retail space vacancies on the rise
The economic slump has resulted in more vacant storefronts in the region. The Milwaukee area’s retail space vacancy rate shot up from 8.7 percent in the second quarter to 10.4 percent in the third quarter, according to Reis. The region’s retail space had a net absorption of 24,000 square feet of space during the third quarter.
Submarket retail space vacancies, according to Reis, are:
- Waukesha County, 7.9 percent (up from 7.7 percent in the second quarter)
- Northern Milwaukee/Ozaukee counties, 10.5 percent (up from 9.0 percent)
- Southern Milwaukee County, 12.8 percent (up from 9.5 percent)
Apartment vacancies fall
The Milwaukee area apartment market continues to provide a ray of sunshine for the region’s real estate market. The Milwaukee area apartment vacancy rate was 3.7 percent in the third quarter, down from 4.1 percent in the second quarter and 4.0 percent in the third quarter of 2007.
Submarket apartment vacancies, according to Reis, are:
- Western Waukesha County, 1.8 percent (down from 2.6 percent in the second quarter)
- Brookfield/New Berlin, 2.5 percent (down from 2.6 percent)
- Wauwatosa/West Allis, 2.5 percent (down from 2.7 percent)
- Cudahy/South Milwaukee/Oak Creek, 3.1 percent (down from 3.6 percent)
- Greenfield/Greendale/Franklin, 3.2 percent (down from 3.5 percent)
- Eastern City of Milwaukee, 5.3 percent (up from 4.8 percent)
- Western City of Milwaukee, 5.5 percent (down from 5.8 percent)
- Northshore/Northwest Milwaukee, 5.7 percent (down from 6.4 percent)
Reis has a local data sharing partnership with BizTimes Milwaukee.
