In its fourth quarter 2013 office market report, Milwaukee-based commercial real estate brokerage NAI MLG Commercial says: “we see strength in much of the office market and signs of continuing improvement throughout 2014.”
Office tenants are in the market looking at options for 2014 and 2015, the firm’s report says.
“Tenants who have been laying low, analyzing their business models and planning for the future, are ready to take the next step and look at new office space,” the report says. “The sweet spot for these deals seems to be in the range of 5,000 to 10,000 square feet, with a couple of deals in excess of 50,000 square feet being shopped to the market.”
The firm’s report did not name the larger office deals in the market, but one could be Brookfield-based Bader Rutter & Associates, a public relations, advertising and marketing firm, that is seeking 60,000 to 70,000 square feet of office space and is considering plans to relocate.
“Developers and landlords are positioning themselves to take advantage of this activity,” the NAI MLG Commercial report says. “Unlike in previous years when tenant moves meant trading one space for another, we think that this wave will result in true net absorption.”
NAI MLG Commercials says the five downtown Milwaukee office buildings that it considers to be class A (the U.S. Bank Center, 100 East building, Milwaukee Center, 875 East building and the Cathedral Place building) have a vacancy rate of only 4.5 percent.
That could be a good sign for Wauwatosa-based Irgens’ efforts to build a 17-story, 357,000-square-foot office building at 833 E. Michigan St.
The vacancy rate for the entire downtown east office submarket is 17.0 percent, according to NAI MLG Commercial. The office space vacancy rate for the entire metro area is 24.0 percent, according to the report.