Milwaukee Office Market
Over the past four quarters, the market has experienced 524,985 square feet of negative absorption. Despite substantial negative absorption, the vacancy rate only increased by 48 basis points, reaching 21.12% up from 20.63% in 1Q 2023. This disconnect can be attributed to the conversion of vacant office buildings into multi-family and industrial uses. While there has a been a lot of movement on the surface, the market’s occupied space is relatively unchanged since the second quarter of 2020 when it measured 28.88M SF it now stands at 28.67M SF. This past quarter, the availability rate rose a modest 5 basis points from 27.20% to 27.25%. Looking at the past year, the availability rate has gradual risen from 26.33% to its current level of 27.25%. The construction pipeline is nearly empty, as there are only three office buildings under construction totaling 146,111 SF.
Milwaukee Industrial Market
This past quarter, the Milwaukee industrial market experienced 341,956 SF of negative absorption. Over the past year, the market has absorbed 1.16 million SF. Since the beginning of the first quarter of 2020, the market has experienced 15.7 million SF of absorption, representing market growth of 5.9%. This past quarter, the availability rate rose to 6.2% from 5.7% and the vacancy rate rose to 4.1% from 3.4%. The market is recalibrating, with vacancy expected to continue to rise next quarter as construction deliveries outpace net absorption. This past quarter there was 1.57 million SF of new construction, of which only 39% was preleased. There is 739,400 SF in the construction pipeline, of which 19% is preleased.