MILWAUKEE, January 25, 2021– The Commercial Association of REALTORS® Wisconsin (CARW) fourth 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 and can be downloaded HERE.
“The commercial real estate market in Southeast Wisconsin was tested in 2020” said Tracy Johnson, President and CEO for CARW. “COVID-19 shutdowns and uncertainty accelerated some key trends in the marketplace. The use of technology, focus on supply chain, and reliance on flexibility defined many facets in business and commercial real estate. Southeast Wisconsin, however, is a relatively stable and resilient market.”
The Milwaukee Office Market posted a second straight quarter decline in absorption and rising vacancy rates to 20% for multi-tenant buildings in Q4. “As tenants paused leasing initiatives to fully understand the impact of COVID on their operations, the fourth quarter put to bed a year of nominal market-wide absorption, short term renewals and deals put on long-term hold,” said Jenna Maguire, Founders 3 Real Estate Services.
“I’m optimistic that there will be an increase in transactional volume this year,” Maguire continued. “Corporate America may pause for the majority of 2021 as they sort out a back to work plan, but local and regional office users are starting to emerge. They are re-thinking location with a focus on creating a desirable and engaging office environment to bring employees back to the office. Downsizing, shifting submarkets or asset classes, and value plays for increased sublease inventory are trends to follow headed into 2021.”
Southeastern Wisconsin’s Industrial market shows continued strength posting more than 6.3 million square feet of positive absorption in 2020. “The Wisconsin Industrial market surpassed much of the national growth and absorption with warehousing and distribution markets serving as the leading asset classes in the fourth quarter,” said Adam Matson, SIOR, Director with NEWMARK. “The 4.0% vacancy rate in our market is lower than any quarter in recent memory, profiling the strength of our local companies and their appetite for growth. This vacancy rate has also increased demand from national and international investors competing for quality, newer construction facilities in the state. Look for vacancy to continue its declining trend and the price of investments to continue to rise.”
2020 has presented highs and lows for the Retail market in Southeast Wisconsin as some COVID – 19 shutdowns crated winners and losers in this space. “These times are challenging for a number of retail categories,” said Kelly Rodenkirk with Cushman & Wakefield | BOERKE Co., “in Q4 we continued to see a number of closures that added to the overall vacancy rate.” “On the flip side, however, we saw spaces become available in strong retail corridors that have not been available in ages and were quickly backfilled with qualified tenants. For retail sales transactions, we saw owner occupants taking full advantage of low interest rates and investment properties are still going strong with single tenant net deals with a drive-thru being a gold standard.”
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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