MILWAUKEE, July 21, 2021 – The Commercial Association of REALTORS® Wisconsin (CARW) second 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 commercial real estate market in Southeast Wisconsin is showing signs of resilience” said Tracy Johnson, President and CEO for CARW. “After 18 months of staggered disruptions, members are bullish on the various product types and remain flexible with lease deals and construction timelines.”
The Southeastern Wisconsin office market posted the first quarter of positive absorption after three quarters of negative absorption. The vacancy rate is at 15.8%. Marianne Burish, Executive Vice President of Transwestern said, “half-way into 2021 office users continue their deliberate and measured re-entry as they re-evaluate market conditions and opportunities. While not to the level of pre-covid, clients are asking for new site searches and wanting to tour again. New leasing and deal activity has improved but shorter-term renewals are equally active as companies seek to balance their space recalibration efforts while retaining flexibility to timely address the still-lingering impact of Covid related workplace and workforce issues. Once Covid is squarely in the rear-view mirror, new leasing activity with a return to longer lease terms will experience a notable pick up.”.
There were 84 office leases signed in Q2, most under 10,000 sf in size. Andrew Jensen, Principal with Cushman & Wakefield | Boerke Company said, “most real estate professionals did not see the office market come back as quickly as it has as of the end of the Second Quarter 2021. While there are major employers who will not populate their offices in the CBD until September there are others who have opened new offices such as Milwaukee Tool and Church Mutual. The suburbs have seen increased demand by office users and may not be surprising to see that the bottom may be in the market as far as rental rates decreasing and sluggish demand.”
Jim Barry, President of Barry Company added, “Seeing the office market strengthening as we emerge from the pandemic is an encouraging sign. While there is still a great deal of uncertainty regarding what the future of the office market will look like, the fact that we are seeing increased leasing activity and absorption is a good portent that the office market is coming back.”
Southeastern Wisconsin’s Industrial market remains strong with nearly 6M sf of multi and single-tenant properties under construction. The second quarter vacancy rate dropped to 3.6%. Jim Barry, President of Barry Company said, “The industrial market is as strong as I have seen it in nearly thirty years in the commercial real estate business. The vacancy rate remains low and quarterly absorption remains high. Companies looking for space have increasingly limited options. This situation will likely prevail through the end of the year and beyond. Look for upward pressure on prices and lease rates as well as more speculative building in most sub- markets. It is a great time to be an owner of industrial property.”
Retail activity for Wisconsin continues to evolve to include creative solutions for redevelopment opportunities and new concepts in the market. Brian Vanevehoven, Managing Director for Newmark said, “the retail market is bifurcated. The enclosed malls are struggling to fill vacant spaces with higher than normal vacancies, but well positioned neighborhood retail is strong with rents ticking up slightly. The investment market for retail is very strong with low interest rates and out of state buyers continuing to chase yield.”
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.
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, A Moody’s Analytics Company’, and The Catylist Network consists of local platforms connecting more than 50 markets, and 70+ Associations from metropolitan areas to multi-state regions, 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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Report is HERE