The southeastern Wisconsin commercial real estate market remained healthy during the third quarter of the year with positive absorption and declining vacancy in the industrial, office and retail sectors, according to the latest report from Xceligent and the Commercial Association of Realtors Wisconsin.
Industrial
The industrial market continues to lead the way for the region with 819,932 square feet of positive absorption in the third quarter, and 3.76 million square feet of positive absorption for the first three quarters of the year.
The industrial space vacancy rate for the region dipped to 4.0 percent in the third quarter, down from 4.1 percent in the second quarter.
The highlight for the region’s industrial market in the third quarter was a lease signed by Brillion-based snow blower and lawn mower manufacturer Ariens to occupy the entire 601,439-square-foot First Park 94 building that Chicago-based First Industrial Realty Trust Inc. is building in Somers, at Highways 142 and H in Kenosha County. Ariens will use the facility for warehouse space.
There are more than 3.1 million square feet of industrial space construction projects under construction in southeastern Wisconsin, according to the Xceligent and CARW report. The largest is Uline’s 880,000-square-foot distribution center that is being built at 38th Street and 120th Avenue in Kenosha.
Office
The southeastern Wisconsin office market had 150,722 square feet of positive absorption in the third quarter, and has had 626,945 square feet of positive absorption in the first three quarters of the year.
The region’s office space vacancy rate dipped to 16.8 percent, down from 17.2 percent in the second quarter. The region’s class A office space vacancy rate is even lower, at 14.4 percent. The class B vacancy rate is at 19.5 percent.
However, the class B market posted more absorption in the third quarter, 121,675 square feet, than the class A market, 29,068 square feet.
The downtown east submarket had 54,061 square feet of positive office space absorption in the third quarter, for all classes.
Retail
The southeastern Wisconsin retail market had 504,407 square feet of positive absorption in the third quarter, bringing the year-to-date total to 829,404.
The absorption was attributed to the completion of: a Meijer store in Waukesha, a Sam’s Club store on the far northwest side of Milwaukee, and At Home occupying a former Kmart store on South 27th Street in Milwaukee.
The region’s retail space vacancy rate in the third quarter was 7.0 percent, down from 7.3 percent in the second quarter.
There is more than 2.1 million square feet of retail space construction ongoing in the region, including The Corners in the Town of Brookfield, 84South in Greenfield and Drexel Town Square in Oak Creek, according to the Xceligent and CARW report.
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