The Milwaukee area commercial real estate market performed well during the second quarter with significant amounts of absorption in the industrial, office and retail sectors, according to the latest data from Xceligent and the Commercial Association of Realtors.
Industrial
The region’s industrial market absorbed 1.5 million square feet of space during the quarter, a huge increase from a year ago when about 800,000 square feet of space was absorbed in the second quarter of 2016. The area added more than 1.8 million square feet of space during the quarter, led by Uline’s new 800,000-square-foot facility in Kenosha. There is another 900,000 square feet of industrial space under construction in the region.
The area’s industrial space vacancy rate rose a bit from 4.1 percent a year ago to 4.3 percent. A total of 400,000 square feet of speculative space was added during the quarter, contributing to the slight increase in vacancy rate.
Retail
The region’s retail market absorbed 724,414 square feet of space during the second quarter, another big increase from a year ago when 123,279 square feet of retail space was absorbed in the second quarter of 2016. The vacancy rate dipped from 7.8 percent a year ago to 7.4 percent.
More than half of the region’s retail space absorption can be attributed to the opening of The Corners of Brookfield development. In addition a 192,940-square-foot Meijer store opened in West Bend.
However several stores will close in the area during the third quarter, including three Pick ‘n Save stores, a Kmart store and a Sears store. That is expected to lead to an increase in the area’s retail space vacancy rate.
Office
The area’s office market absorbed 100,371 square feet of space during the second quarter, down from 127,749 square feet a year ago, but the highest amount of absorption since the third quarter of 2016.
The area’s office space vacancy rate dipped from 17.2 percent a year ago to 16.5 percent.
There is only 173,500 square feet of office space currently under construction and only 10 existing buildings have large blocks of contiguous space of more than 50,000 square feet.
