MILWAUKEE, October 20, 2020– The Commercial Association of REALTORS® Wisconsin (CARW) third 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.
“The impact of COVID-19 shutdowns are showing in the data” said Tracy Johnson, President and CEO for CARW; however, “there are many new developments still under construction,” she added. As a result of construction’s continuation through the shutdowns, planned deliveries will be met in 2020 and 2021.”
Milwaukee office vacancy had been dropping throughout the last quarters of 2019 and into 2020. In Q2 the market saw that trend reverse. “Showing velocity slowed in the 3rd quarter, and overall transaction time has increased as tenants rethink their office space needs,” said John Dulmes, Executive Vice President for Transwestern. “Additional leasing incentives offered by landlords, such as increased free rent and slightly lower asking rates, are becoming more prevalent, which will hopefully increase activity,” he added. “We’ve also seen an increase in sublease space availability, which will likely put additional price pressure on direct lease rates.”
While Q3 showed 1,800 sf negative absorption, year to date absorption is still positive at 74,000 sf. Dan Wroblewski, Partner with Colliers International, Wisconsin remarked, “Time will tell how things play out over the next few quarters but we are starting to see some leasing activity picking up a bit in certain areas of the market, specifically in the suburbs.”
Southeastern Wisconsin’s industrial market continued to show strength and resilience in Q3 with more than 1.3 million square feet of speculative product delivered in 2020. “We are still seeing strong demand for space as leasing activity has seen a 66% year-over-year increase from Q3 2019,” said Nick Unger with Cushman & Wakefield | Boerke Company. “We remain bullish on the industrial market, closing out 2020 and heading into 2021 as logistics and e-commerce tenants continue to take on more space in our marketplace.”
Impacts on the retail sector continue to evolve as restaurant tenants and small businesses in Milwaukee and surrounding cities grapple with varying public policy measures and capacity restrictions. Vacant boxes are seeking adaptive reuses and mall concepts like Bayshore are pivoting to include a more multi-faceted use concept that includes office and activation areas.
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.
You can view the full Q3 Market Report HERE