The delivery of several large products to the market during the first quarter have boosted absorption numbers and vacancy rates are remaining steady, according to the most recent southeastern Wisconsin commercial real estate data from CARW and Xceligent.
Through the first quarter of 2016, the Milwaukee office market absorbed 338,237 square feet and the total vacancy rate fell 0.1 percent from last quarter to 17.8 percent.
Average asking rates are at $19.40 per square foot, up 96 cents per square foot over last year and 17 cents per square foot over last quarter.
The largest absorption created in the first quarter of 2016, comes from the new 833 East Michigan office building in downtown Milwaukee, which was 64 percent leased at the time of completion.
“The strengthening office market fundamentals in the Milwaukee region continue to support the increased investor appetite for office properties,” said Matson Holbrook, MBH Investment Real Estate, “Especially from out-of-state buyers.”
Through the first quarter of 2016, the Milwaukee industrial real estate market absorbed 2,027,746 square feet. The total vacancy rate climbed slightly, 0.1 percent from last quarter to 4.1 percent
The average asking rate remains relatively steady at $4.36 per square foot, up 11 cents per square foot over last year and down 1 cent per square foot from last quarter.
Uline’s warehouse-distribution center in Kenosha brought 1.2 million square feet to the market.
“Economic factors fuel the industrial market,” said Paul McBride with RFP Commercial, “Recent job numbers in Wisconsin are topping 3 million for the first time and manufacturing PMI indicated strong growth in southeastern Wisconsin. Both are strong indicators of what should be expected for 2016, with solid vacancy rates and continued positive absorption.”
Through the first quarter of 2016, the Milwaukee area retail real estate market absorbed 65,108 square feet. The total vacancy rate climbed 0.2 percent from last quarter to 7.8 percent.
The average asking rate fell slightly to $10.59 per square foot, down 32 cents per square foot from last quarter, but up 17 cents per square foot over last year.
The two largest retail projects completed in the region during the first quarter were the second phase of the Mayfair Collection project in Wauwatosa, which includes a Whole Foods store, and the Bluemound Road Power Center in Brookfield, a former Kmart store building that is now occupied by Dunham’s and Hobby Lobby stores.
“The better positioned assets have been able to be re-purposed by other retailers and a handful of new-to-market retailers, however we will reach a tipping point where the good assets are all gone and what remains will see little demand for retail use,” said Cory Sovine of Colliers International.
Read more economic data reports on the BizTracker page.
