FOR IMMEDIATE RELEASE
Contact: Tracy Johnson, President & CEO, CARW | 414-698-7474 | [email protected]
Chris Allen, Director of Analytics, REDIComps | 952-456-1669 | [email protected]
CARW / Catylist Release 2022 Q1 Madison Commercial Numbers
MILWAUKEE, May 9, 2022 – The Commercial Association of REALTORS® Wisconsin (CARW) 2022 first quarter numbers show a market and economic overview of the industrial, office and retail markets. The market reports are produced in collaboration with CARW members, Moody’s/Catylist and REDIComps Research. The overview report is HERE
The Madison area office market continues to remain in a state of flux. The 1st quarter shows some signs of improvement with vacancy dropping slightly to 11.7% overall. In addition, over 175,000 sf of office space was absorbed. Overall, the market vacancy rate remains 3.5% greater than when the pandemic started. “Tenants continue to look at downsizing as they find balance in “work from home / hybrid” work styles.” Said Craig Stanley, Principal, Broadwing Advisors. “Positive economic activity has resulted in some increased leasing activity, however, marketed ‘Available Space’ represents an additional 700,000 square feet more space than reported vacancy, representing another 3.9% of the market. For example, TDS recently extended its lease reducing 70,000 square feet representing almost 1/3 of TDS office space.”
Chris Richards, Principal with Colliers commented, “despite a strengthening office market, headwinds remain as some of the area’s larger occupiers continue to struggle with their “return to office” pace and policy and how those decisions ultimately impact their footprint.” “That being said, a number of larger active users in the market should help temper any significant downside caused by these decisions.” When it comes to new projects, Richards suggested, “Historically high construction costs, rising interest rates and lingering uncertainty will likely delay new office development which should help with market dynamics in the near term.”
The Madison industrial market continues to be extremely strong with vacancy holding steady at just 2.8% and absorption above 230,000 square feet for the first quarter. There is over 1 million square feet under construction now, with new Class A warehouses and flex projects both showing brisk pre-leasing. “In addition to the four Class A warehouses under construction now, several other developers are finalizing their entitlements and expect to break ground on more product by Fall,” said Chris Caulum, Vice President, Oakbrook Corporation. The sale market is also hot, continuing a recent trend. “There is pent up demand by owner-occupants and investors alike in any new sale listings that hit the market,” Caulum added. “Buyers seem to have plenty of capital to buy and improve the buildings, and the interest rate increases haven’t scared anyone off thus far.”
The Madison Commercial Real Estate market “New Retail Development leads the charge in southern Wisconsin (Madison)” according to Heather Ewing, Founder & CEO of ABSTRACT Commercial Real Estate. The southwestern prevails at 59.2% leaving a large spread for the next contenders of West (24%) and Central (12.3%). There’s a good balance between local, regional and out of state development across Dane county. The dichotomy of new construction to increased absorption is exemplified through the west at 15.6% with the east (13.1%) and central (11.6%) closely behind. The removal of the Mask Mandate will further increase retail leases as will the fast approaching spring weather. Retailers are re-imagining concepts and floor plans through additional drive-thrus, app driven pick-up lanes and Madison’s first Ghost Kitchen in the downtown. Rising inflation is driving shorter lease terms and more aggressive sales.
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.
Moody’s, a global integrated risk assessment firm that empowers organizations to make better decisions recently purchased Catylist, a commercial real estate software company that supports the commercial data exchange systems in more than 50 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.