Southeastern Wisconsin’s office, industrial and retail real estate markets posted strong levels of space absorption during the third quarter, according to the latest report from Xceligent and the Commercial Association of Realtors Wisconsin.
Retail
The retail market led the way with 590,409 square feet of absorption during the third quarter, bringing the vacancy rate down to 8.12 percent.
The Milwaukee County retail market led the region with 446,079 square feet of positive absorption.
The opening of two Meijer stores, in Wauwatosa and Grafton, and the addition of the Nordstrom store at Mayfair Mall in Wauwatosa, boosted the Milwaukee County numbers. Those three stores accounted for 554,940 square feet of absorption.
Industrial
The industrial market posted 588,515 square feet of absorption during the third quarter. It was the 22nd consecutive quarter of positive absorption for the region’s industrial market, which has absorbed 23 million square feet since the second quarter of 2010.
The region’s vacancy rate ticked up a tad to 4.92 percent due to more than 1.2 million square feet of new construction added to the region’s industrial space inventory.
The Kenosha County had 576,414 square feet of space absorption, mostly attributable to completion of a 520,000-square-foot distribution center for Uline.
The Racine County market had negative absorption of 132,525 square feet, largely because the region added 600,000 square feet of new industrial space construction in the quarter.
“We anticipate the industrial trends for southeast Wisconsin to remain strong in the fourth quarter; both on the user-buyer and investment side,” said Brian Parrish, president of Paradigm Real Estate. “Leasing has slowed, however, as banks compete to lend money to industrial users for building acquisitions or expansions.”
Office
The Milwaukee area office market absorbed 121,389 square feet of space in the third quarter, which lowed the vacancy rate to 18.4 percent.
The Downtown East submarket had 75,761 square feet of positive absorption in the quarter, the highest in the region. The North Shore submarket had negative absorption of 71,682 square feet, the biggest decline in the region. Both of those trends were largely the result of Empower Retirement’s move from Glendale to the Chase Tower in downtown Milwaukee.
