FOR IMMEDIATE RELEASE
Contact: Tracy Johnson, President & CEO, CARW | 414-698-7474 | [email protected]
Chris Allen, Director of Analytics, REDIComps | 952-456-1669 | [email protected]
CARW / Catylist Release 2021 Q4 Commercial Numbers
MILWAUKEE, January 19, 2022 – The Commercial Association of REALTORS® Wisconsin (CARW) 2021 fourth quarter numbers show a market and economic overview of the industrial and office industries, and notable transaction report for retail. The market reports are produced in collaboration with CARW members, REDIComps Research, and Catylist.
“Wisconsin’s Commercial Real Estate market continues to persevere despite the uncertainty associated with the ongoing pandemic,” said Tracy Johnson, President and CEO for CARW. “Multiple disruptions have really tested the industry and push all businesses to contingency plan and adapt as supply chain issues, work from home extensions, and mandates persist.”
The Southeastern Wisconsin office market ended 2021 with 216,000 sf of positive net absorption and a 15.3% overall vacancy rate. The numbers are far more promising than they were in Q1 when data showed negative absorption and a vacancy rate of over 16.5%. “Office-showing activity and decision-making ability remained tepid due to the Omicron variant causing “return to office” policies to remain on hold for many companies,” said John Dulmes, broker with Transwestern. “Upward pricing pressure from construction costs continue to limit landlord flexibility on tenant leasing incentives, and project lead times remain a concern due to supply chain issues and construction labor shortages. There is optimism, however as vacancy rates have seemingly plateaued.”
The report shows there were 104 office leases executed in Southeastern Wisconsin in Q4. Throughout 2021, 357 office leases were signed. Of the 104 in Q4, only seven of them were for more than 10,000 sf. The largest office lease in Q4 was Symbiont Science, Engineering & Construction subleasing 35,800 sf.
Southeastern Wisconsin’s Industrial market remains strong with nearly 7.8M sf of multi and single-tenant properties under construction. “Thanks to robust demand and historically limited vacancy, the industrial market is experiencing accelerated rent growth and vacant property appreciation throughout 2021, and Q4 has been no different,” said Cody Ziegler with Cushman & Wakefield | The Boerke Company. “As the vacancy rate remains compressed, we are seeing tenants aggressively compete for space leading to limited concessions from landlords. We expect continued rent growth, especially for Class A industrial space.” Ziegler suggests that new construction may relieve some pressure on the market but rising construction costs will command higher rent.
Retail activity for Wisconsin is seeing movement as users seek creative solutions for redevelopment opportunities and new concepts. “In Q4 the retail market activity remained steady with mid-box users aggressively pursuing the demise of many former big box stores,” said Fred Stalle, with Mid-America Real Estate. “Small shop leasing saw consistent deal making with national users; while local entrepreneurs continue to see incentives at the state level filling empty storefronts.” The Mainstreet Bounceback program is extremely popular with retail users who have moved or are looking to relocate to vacant space. “Cap rates continue compressing within the triple net market, showcasing Wisconsin as a great place to do business for out of state money,” Stalle continued. “Recapitalizing assets continues to be a theme as we expect strong demand heading into 2022.”
About CARW: CARW is the VOICE for commercial real estate brokerage and related professionals in Wisconsin. Founded in 1993, CARW is dedicated to the success of our members by providing public policy advocacy, invaluable educational opportunities, networking experiences and data exchange. CARW supports more than 900 commercial real estate professionals in 500 companies throughout Wisconsin and the region. CARW also oversees the statewide data exchange that tracks commercial lease and sale information. Members represent more than 36.5 M sf of commercial real estate available for sale and nearly 63 M sf available for lease.
About REDI: Founded in 1994, REDI is the original fully researched CIE/CMLS exchange. REDI provides tailored commercial real estate products for the commercial real estate industry, including a complete market property universe continuously updated with the latest availabilities and sales transactions. REDI/Catylist provides fully researched market data and Commercial Data Exchange Services to more than 50 markets nationwide. Visit www.redicatylist.com/carw for more information.
About Catylist: Catylist is a commercial real estate software company owned by Moody’s that supports commercial data exchange systems in more than 50 markets across North America. Catylist partners with brokerage firms, local associations, and economic development communities to create a customized, local database that serves as the most trusted source for information in the market.
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