MILWAUKEE, April 21, 2021 – 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. The Q1 Report is HERE.
“We are now one year beyond the initial pandemic shutdowns that put a lot of commercial real estate transactions on pause,” said Tracy Johnson, President and CEO for CARW. “While Q1 numbers show higher vacancy rates and lower absorption, there is a great deal of optimism amongst practitioners in the market. As vaccine rollouts continue and the supply chains loosen up, many expect the third and fourth quarters of 2021 to reflect recovery.”
The Southeastern Wisconsin office market posted a third straight quarter decline in absorption and rising vacancy rates to 16.7%. More than 600,000 sf of office product are under construction. Joe Moritz with Colliers International suggests that we may be at the low point and will only see growth from here. “Smaller local and regional users, especially in the suburbs, continue to remain active, and many of the larger national and global groups are beginning to have leasing conversations. Both tour activity and deal velocity began to pick up at the end of Q1 and we now track the highest number of known tenants seeking space since the beginning of Q3 2019.”
Moritz continued, “larger corporate users planning to return to the office throughout this summer, coupled with vaccinations are leading the rebound of the office market which will translate to a competitive market for landlords. The impact of increased sublease inventory and tenant downsizing will definitely affect the market too.”
Industrial real estate continues to perform well as it did through the pandemic. In many cases, industrial out-performed other sectors due to cold storage, warehousing and logistics needs. “We have a very positive outlook for the industrial market in SE Wisconsin for the foreseeable future,” said Michael Kleber, Director of Industrial Leasing for Zilber. “We have seen increased activity with occupiers given the pent-up demand following a year of uncertainty. Companies are gaining confidence and are motivated to look towards long-term growth needs. SE Wisconsin industrial market continues to experience historically low vacancy rates. We predict this trend to continue due to robust demand coupled with escalating development costs.”
Retail has been amongst the hardest-hit sectors, but there are a number of notable sale and lease transactions that have taken place as the market stabilizes. “The outlook continues to improve,” said Tom Treder, Principal with Founders 3. “Retail sales have easily cleared pre-pandemic levels and are up, which has translated into new activity for well-positioned properties and shopping centers. Not all categories are expanding, but we are cautiously optimistic.”
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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Contact: Tracy Johnson, President & CEO, CARW | 414-698-7474 | [email protected]
Chris Allen, Director of Analytics, REDIComps | 952-456-1669 | [email protected]