MILWAUKEE, April 21, 2020– The Commercial Association of REALTORS® Wisconsin (CARW) first quarter numbers show a market and economic overview of the industrial and office industries and notable transaction report in retail. The market reports are produced in collaboration with CARW members and REDIComps Research and Catylist. View Q1 Release HERE
“All sectors within Southeastern Wisconsin’s commercial real estate market were off to a strong start to the year,” said Tracy Johnson, CEO for CARW. “As Commercial brokers prepare for Q2, they are looking at the various opportunities that may come from the COVID-19 economic disruptions.”
“The office market had a solid start to the first quarter of 2020,” said Matt Hunter, Executive Vice President of JLL Wisconsin. “As we prepare for Q2 and beyond, we are all challenged by the global pandemic of COVID-19. Moving forward it’s important that we continue to prioritize our health and safety while also sending a message that the Milwaukee office market is still open for business.”
The vacancy rate for the industrial market increased from 4% in Q4 2019 to 4.1% in Q1 2020, despite positive absorption of 337,240 SF in the quarter. “Industrial activity was strong at the beginning of the year but slowed tremendously due to the Pandemic,” said Brian Parrish, President & CEO for PARADIGM Commercial Real Estate. “We are now seeing a low-level resumption of sales and leasing activity in the 2nd quarter, and expect more robust 3rd and 4th quarters. Growth in the industrial commercial real estate sector during the “new norm” will likely be fueled by a combination of the following: greater e-commerce and localized supply chain needs, shorter lead time requirements resulting in more on-shoring, and increased (national) demand for (local) cost-efficient and reliable manufacturing services.”
“Retail leasing activity in the first quarter of 2020 is a tale of two halves,” said Russ Sagmoen, Executive Vice President at Colliers Wisconsin. “During the first half, there was cautious optimism with decent leasing activity, tours, and non-binding letters of intent. As the outbreaks of COVID-19 continued to rise overseas the cautious optimism flipped quickly to ‘a wait and see approach,’ then in mid-March, retailers shifted from cautious optimism to how to safely operate, to the reality that many brick and mortar stores are closed.”
Sagmoen continued, “Looking towards Q2, some essential retailers, such as grocery and delivery-based businesses have seen an uptick in business and will continue to do well. This has its challenges when trying to incorporate safety and social distancing for employees and customers while curbside pick-up and delivery is the only option for many retailers. As it looks, closures will last through at least the first half of Q2 and leasing activity is expected to be extremely low. A major concern for retailers and landlords is a lack of liquidity and we continue to expect rapid changes in retail and the real possibility of permanent closures.”
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 875 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.
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.
Catylist is a commercial real estate software company that supports commercial data exchange systems in more than 45 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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