Region’s office vacancies continue to rise

The Milwaukee area’s office space vacancy rate rose to 14.7 percent during the second quarter, up from a 14.3 percent vacancy rate during the first quarter, according to new data from New York-based Reis Inc., which provides commercial real estate market information.

The Milwaukee area’s office space vacancy rate is at its highest level since the third quarter of 2006 and is up from the 13.2 percent vacancy rate of one year ago. The local vacancy rate is lower than the Midwest average of 16.5 percent, but it exceeds the U.S. average of 13.0 percent, according to Reis.

Class A office space in the Milwaukee area is faring better, with a vacancy rate of 11.0 percent, down a tad from 11.1 percent in the first quarter and the same as a year ago.

Class B and C office space in the area is not faring as well, with a 17.6-percent vacancy rate, up from 16.8 percent in the first quarter. That’s the highest vacancy rate for class B and C space in the area since the second quarter of 2006.

Local submarket office space vacancies, according to Reis are:

  • Downtown Milwaukee, 13.0 percent
  • Brookfield, 18.1 percent
  • Western Waukesha County, 14.0 percent
  • Northern suburbs, 12.3 percent
  • Wauwatosa/West Allis, 18 percent
  • Greenfield/south, 11.8 percent

The downtown office space vacancy rate is up from 12.4 percent in the first quarter.

Retail space

The Milwaukee area’s retail space vacancy rate was 8.7 percent for the second quarter, according to Reis, down from a 9.1 percent vacancy rate in the first quarter. It was the third straight quarter that the area’s retail space vacancy rate had declined. The area’s retail space vacancy rate is well below the 10.7 percent vacancy rate for the Midwest, but is slightly above the U.S. rate of 8.2 percent.

Submarket retail space vacancies, according to Reis, are:

  • Waukesha County, 7.7 percent
  • Northern Milwaukee/Ozaukee counties, 9.0 percent
  • Southern Milwaukee County, 9.5 percent

Apartments

The Milwaukee area had an apartment vacancy rate of 4.1 in the second quarter, according to Reis, up from 3.8 percent in the first quarter but down from the 4.4 percent vacancy rate during the second quarter of 2007.

The Milwaukee area’s apartment market is faring better than the Midwest, which has a 5.8 percent vacancy rate, and the United States as a whole, which has a 6.0 percent vacancy rate.

Submarket apartment vacancies, according to Reis are:

  • Brookfield/New Berlin, 2.6 percent
  • Western Waukesha County, 2.6 percent
  • Western City of Milwaukee, 5.8 percent
  • Wauwatosa/West Allis, 2.7 percent
  • Greenfield, 3.5 percent
  • Cudahy/South Milwaukee, 3.6 percent
  • Eastern City of Milwaukee, 4.8 percent
  • Northshore/northwest, 6.4 percent

Reis has a local data sharing partnership with Small Business Times.

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