Southeast Wisconsin's industrial real estate market softened slightly in the fourth quarter of 2024, but still closed out the year with millions of square feet of absorption and an overall healthy vacancy rate.
That's according to the latest report from the
Commercial Association of Realtors Wisconsin (CARW), which found the region's industrial vacancy rate at 5.6%, which is around what the rate held at for all of 2024. The rate was 5.5% in Q3 and 5.7% in Q2.
In a sign of softening at the end of the year, the market had about 177,000 square feet of negative absorption, compared to the previous two quarters that posted significant positive absorption.
Overall in 2024, the market absorbed more than 2.7 million square feet of space, mostly driven by activity in warehouse distribution facilities in Racine and Kenosha Counties, the report shows.
Racine County absorbed more than 324,000 square feet of warehouse distribution space and Kenosha County absorbed more than 2.4 million square feet of warehouse distribution space.
Consistent with previous quarters, Kenosha County has the region's highest vacancy rate at 12.5%, mostly driven by the delivery of large speculative facilities along the I-94 corridor that have yet to lease up. Racine County follows with a 7.9% vacancy rate for the fourth quarter.
Elsewhere, vacancy rates have remained below a healthy rate—which industry experts generally say is around 5%, post-pandemic.
Fourth-quarter vacancy and absorption by county
Kenosha: 12.5% / +315,970 sf
Racine: 7.9% / +24,644 sf
Milwaukee: 7.5% / -54,786 sf
Ozaukee: 1.9% / -33,801 sf
Sheboygan: 1.3% / +13,471 sf
Washington: 3.2% / +8,787 sf
Waukesha: 1.2% / -441,762 sf
Walworth: 0.7% / -9,715 sf
