Region’s office market shows slight improvement

The metro Milwaukee office market continues to show slow improvement, according to the latest Xceligent data.

The region’s office market posted 28,713 square feet of positive absorption in the quarter and its office space vacancy rate dipped to 18.8 percent, down from 19.5 percent a year ago and 18.8 percent in the fourth quarter of 2014.

Class A properties in the region had 54,594 square feet of positive absorption, outperforming class B and C properties, according to the Xceligent report. The most noteworthy lease in the quarter was Northwestern Mutual’s lease of 66,372 square feet of space at 411 E. Wisconsin Ave. in downtown Milwaukee.

However, the downtown office market was hurt when JP Morgan Chase vacated 67,410 square feet of space during the quarter in the Chase Tower building.

The most noteworthy office space sale in the quarter was SC Johnson’s purchase of the 243,287-square-foot former Diversey headquarters for $27.6 million.

The Downtown East office space submarket had a 16.43 percent vacancy rate and the Downtown East class A market had a 9.71 percent vacancy rate, according to Xceligent.

First quarter office space vacancy rates and absorption by submarket (all classes):

  • Downtown East: 16.22 percent, 20,239 square feet
  • Downtown West: 23.83 percent, 53,899 square feet
  • Mayfair/Wauwatosa: 21.89 percent, -16,048 square feet
  • North Shore: 20.97 percent, -8,578 square feet
  • Northwest: 12.61 percent, -5,787 square feet
  • Southeast: 40.79 percent, 0 square feet
  • Third Ward/Walker’s Point: 20.55 percent, 7,202 square feet
  • West Allis: 19.45 percent, 2,218 square feet
  • Brookfield: 19.99 percent, 26,526 square feet
  • Waukesha/Pewaukee: 15.42 percent, 3,316 square feet
  • New Berlin/Muskego: 13.03 percent, 0 square feet

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