The Milwaukee area’s office space vacancy rate is at 17.11 percent, according to Brookfield-based NAI MLG Commercial‘s first quarter 2009 office market forecast. The region’s office space vacancy rate improved from 17.4 percent in the third quarter of 2008, despite negative absorption of 74,144 square feet of space during the fourth quarter, the NAI MLG report says.
The strongest office submarket in the region is the Pewaukee/Waukesha area, with a vacancy rate of 6.5 percent, down from 6.6 percent in the third quarter, according to the report.
"This is an incredibly healthy market," the NAI MLG report says. "It is only a matter of time before a new office park is developed in Waukesha County because it is such a desirable location for major office development."
However, RedPrairie’s decision to cancel its plans to move to a new building in Delafield has set back plans for a new office park there.
At the other end of the spectrum, the downtown west submarket has the highest vacancy rate at 26.7 percent, but showed considerable improvement from 31.2 percent in the third quarter. The submarket had positive absorption of 39,778 square feet during the fourth quarter. Schlitz Park and the former Reuss Federal Plaza building attracted tenants in the fourth quarter, the report said. The Pabst brewery redevelopment has also attracted some office tenants.
"We see this as a positive catalyst for the eventual development of the Park East corridor," the report says. "While it might not happen today or tomorrow, the acceptance of downtown west by so many tenants in 2008 will set the framework for establishing a critical mass of tenants west of the (Milwaukee) River."