FOR IMMEDIATE RELEASE
Contact: Tracy Johnson, President & CEO, CARW | 414-698-7474 | tracy@carw.com
Chris Allen, Director of Analytics, REDIComps | 952-456-1669 | chris@redicomps.com
CARW / Moody’s Release 2023 Q3 Commercial Numbers for Southeast Wisconsin
MILWAUKEE, October 2023– The Commercial Association of REALTORS® Wisconsin (CARW) 2023 third quarter numbers show a market and economic overview of the industrial and office industries, and notable transaction report for retail. The market reports are produced in collaboration with CARW members, Moody’s/Catylist and REDIComps Research. The Q3 report is HERE
“Wisconsin’s Commercial Real Estate leaders continue to respond to the ever-changing needs of businesses and consumers,” said Tracy Johnson, CEO for CARW. “CARW’s quarterly reports give a snapshot in time and show us the challenges and opportunities across all sectors.”
Third quarter office numbers showed 101 lease comps with 78 in suburban markets. “While summer is typically a slow time of year Q3 2023 turned out to be a very active quarter for companies exploring lease options. Though deals are still taking a long time to transact, the activity was a welcome surprise, and we expect to see many of those deals closing in the fourth quarter,” said John Davis, Founders 3 Real Estate. “The Flight of Quality could not be truer, as Class A buildings still prove to be successful. Buildings that are not well maintained or that do not have amenities continue to struggle.” Multi-tenant-only properties saw a vacancy rate of 24.3% in Q3.
With many companies embracing the hybrid work model nationally, causing a need for less, more flexible office real estate, we’ve seen some firms locally buck that trend by making long-term commitments in the market,” said Ben Anderson, Colliers Wisconsin. “The most notable example is Baird, which signed a 5-year expansion & extension at the US Bank Building for 456,000 sf across 21 floors. Annex Wealth Management took nearly 50,000 sf in Brookfield Lakes, and M3 Insurance will take 20,000 sf at Irgen’s new building at the Innovation Campus,” Anderson continued. “Additionally, we’re starting to see sublease spaces come off the market as tenant’s existing leases come to an end making move-in ready spaces all that much more valuable.”
Southeastern Wisconsin’s Industrial market posted 359,000 sf of positive absorption in Q3 despite the economic headwinds. “Transaction velocity has continued to slow as the reality of higher interest rates and a weaker consumer sentiment cool demand,” said Nick Keys, The Dickman Company. “Most of the activity from Q3 was sales and leasing from manufacturing users, which contrasts Q3 of 2022 where we saw predominantly warehousing users in the market.” Construction continues in Southeast Wisconsin with 7.9 MSF currently under construction.
“In Q3, the retail landscape varies across segments,” according to Cory Sovine of Colliers Wisconsin. “Properties such as pad sites and endcaps offering drive-thru options remain exceptionally sought after. Despite this demand, the retail sector faces challenges due to elevated interest rates and construction costs, hindering new developments. Consequently, existing spaces are experiencing a surge in demand, resulting in limited inventory and soaring prices, which, in some cases, have reached unsustainable levels.”
About CARW: 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.
About Moody’s/Catylist: 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.
About REDI: 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.
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