January 2026– The Commercial Association of REALTORS® Wisconsin (CARW) 2025 fourth quarter numbers show a market and economic overview of the industrial, office and retail report. The market reports are produced in collaboration with CARW members, Moody’s, and REDICRE Research.
SE Wisconsin Report
Madison Report
SE Wisconsin Key Insights:
Office Market:
The Southeast Wisconsin office market closed Q4 2025, showing early signs of stabilization, as leasing activity and transaction volume improved across both suburban and CBD submarkets. While vacancy levels remain elevated, underlying demand continues to support gradual market normalization.
“The Milwaukee office market ended 2025 on a positive note, posting more than 262,000 square feet of positive net absorption in Q4 and pushing year-to-date gains above 266,000 square feet. Steady suburban demand and improving fundamentals signal an office market that is stabilizing and gaining momentum.”- Matt Hunter | Hunter Real Estate
Industrial Market:
Industrial activity remained a key strength in Southeast Wisconsin, with 2.1 million square feet of positive absorption in Q4 and a year-end vacancy rate of just 5.3%. Strong leasing, active investment sales, and more than 2.6 million square feet currently under construction reflect continued confidence in the region’s long-term industrial outlook.
“As the market moves into 2026, Southeastern Wisconsin’s industrial sector remains on solid ground, with tenant demand steady though modestly softer. Availability has edged higher, but disciplined development and ongoing construction continue to signal confidence in the region’s long-term industrial fundamentals.”
— Cole Russell, SIOR | Judson & Associates
Retail Market:
The retail market posted 63,700 square feet of positive absorption in Q4, holding vacancy at a healthy 6.2% despite remaining slightly negative for the year overall. Ongoing leasing activity—particularly in freestanding and neighborhood centers—continues to reflect resilient consumer demand and selective expansion across the region.
“Retail market fundamentals improved over the course of 2025, driven by limited new supply, robust backfilling activity, and reduced uncertainty around tariffs and consumer spending. We are also beginning to see an uptick in construction activity for multi-tenant retail centers, with most new development concentrated in the Waukesha Northwest submarket.” — Heather Dorfler | Cushman & Wakefield, BOERKE Co.
Madison Key Insights:
Office Market:
The Madison office market closed Q4 2025 with a 15.9% vacancy rate and modest positive absorption for the quarter, reflecting a stable but selective leasing environment following net negative absorption earlier in the year. Transaction activity remained healthy, with steady sales and leasing underscoring continued confidence in well-located, high-quality assets.
“The Madison office market continues to tread water in the fourth quarter. Vacancy in the 15% range reflects a healthier market than most in our region. Smaller deals still dominate activity, contributing to a slower return to market highs.” — Chris Richards, Colliers Wisconsin
Industrial Market:
Madison’s industrial market continued to outperform, posting 320,600 square feet of positive absorption in Q4 and ending the year with a low 3.6% vacancy rate, driven by new deliveries and strong demand in the northeast submarket. Significant construction activity and sustained leasing reinforce Madison’s position as one of Wisconsin’s tightest and most competitive industrial markets.
“The Madison industrial market continues to see steady lease-up driven by pent-up investor demand. However, pricing expectations for owner-user properties remain a challenge, limiting feasibility for investor buyers and increasing demand for repurposed Class B and C industrial space.” — Ben Filkouski, CCIM | Madison Commercial Real Estate
Retail Market:
The retail sector remained resilient, recording 27,800 square feet of positive absorption in Q4 and finishing the year with a 5.7% vacancy rate. Consistent leasing activity, particularly in neighborhood centers and freestanding formats, highlights steady consumer demand across the Madison market.
“Madison’s retail market remains strong, with vacancy tightening well below the national average and speculative construction remaining extremely limited. Q4 leasing activity skewed toward smaller deal sizes, reflecting the continued evolution of retail tenant needs.” — Aziah Backus | Cushman & Wakefield, BOERKE Co.