Milwaukee-area commercial real estate professionals are becoming more confident about the marketplace, which continues a slow recovery from the Great Recession, according to the results of the annual Commercial Realtors Association of Wisconsin (CARW) member survey.
Asked, “What is your impression of the current commercial real estate market?” 48.7 percent of CARW members said “flat,” 42.7 percent said “improving” and only 8.7 percent said “weak.”
That’s a big improvement from last year’s CARW member survey when 36 percent said the commercial real estate market was “weak” and only 35 percent said it was “improving.”
In this year’s CARW member survey, 82 percent said they believe the southeastern Wisconsin commercial real estate market will improve in 2013. That’s up from last year when 65.5 percent predicted the market would improve in 2012.
When asked, “How would you describe the current condition of the capital markets for development?” 55.3 percent of CARW members said “flat,” 42.7 percent said “improving” and only 2 percent said “declining.”
Again, that is an improvement from last year when 67 percent of CARW members said the capital markets were “flat,” only 18 percent said they were “improving” and 15 percent said they were “declining.”
“This is a good sign” said CARW president and chief executive officer Jim Villa. “(Developers) will tell you, they need capital.”
When asked their outlook of the southeastern Wisconsin industrial real estate market, 71.3 percent of CARW members said “improving,” 25.3 percent said “flat” and only 3.3 percent said “declining.”
“This has been reflected by our market data,” Villa said.
Indeed, recent market data indicates that Milwaukee has arguably the strongest industrial real estate market in the nation. In the third quarter of this year, the region’s industrial real estate market had positive net absorption of 1.7 million square feet and a vacancy rate of 6.7 percent, according to the latest Xceligent and CARW market report.
Only three regions had higher levels of industrial space absorption in the third quarter: Chicago, Louisville and Dallas and all three of them had higher vacancy rates than the Milwaukee region, according to Cassidy Turley.
The office and retail markets are not as strong as the industrial market in the Milwaukee area.
Of those surveyed, 64.7 percent of CARW members said the region’s office market is “flat,” 23.3 percent said it is “improving” and 12.0 percent said it is “declining.”
For retail in the region, 42.7 percent of CARW members said the market is “flat,” 53.3 percent said it is “improving” and 4 percent said it is “declining.”