Slowdown affects facilities leasing,

Boerke notes in new mid-year report
Corporate downsizing and the economic slowdown in general have led to a reduced demand for office space in the Milwaukee area, the Boerke Co. real estate firm reports in a mid-year market review.
The review was created to complement the firm’s annual review and forecast, in response to the this year’s economic stagnation.
While the office market “showed continued signs of deterioration,” the report also notes that the retail market remains “too hard to call” and the industrial market being slow.
The report says the slowdown in office activity is “best illustrated by the most typically active markets (Wauwatosa, Brookfield/Pewaukee) shoing weaknesses with vacancies increasing one to two percent.” In general, the report says, there are fewer tenants looking for spaces over 25,000 square feet, “leaving developers leery of starting new projects on a speculative basis.”
The changing economy has also prompted office tenants to seek more flexibility to add or reduce leased space.
In the industrial sector, the report notes high vacancy rates near Mitchell International Airport and in Franklin, in the western suburbs and on the northwest side. High-bay distribution facilities were reported as “a particular challenge to fill … as most companies were shying away from expanding their warehousing/distribution operations.” The softer industrial market has led landlords to make concessions to tenants, it notes.
The industrial purchase market was a positive, the report says, noting the quick sale of buildings in the 5,000- to 15,000-square-foot range and the existence of more buyers for such facilities. A 30,000-square-foot building sold for $125,000 over the asking price, according to the report.
On the retail scene, the firm reiterates its earlier statement that the stock market will have an impact on the retail sector. But the report also notes strong demand in small retail centers and ongoing projects by large retailers and the renovation of the Grand Avenue Mall in downtown Milwaukee.
Aug. 17, 2001 Small Business Times, Milwaukee