This is the season of good industrial news, with commercial real estate companies sending a steady stream of reports touting low vacancy rates and surging demand for this asset class in cities across the country.
Newmark’s third-quarter industrial report for Milwaukee is no exception.
According to Newmark’s report, demand continues to rise for industrial assets throughout the Milwaukee market. For the first nine months of the year, this market has absorbed 3.35 million square feet of industrial space. Of that number, a solid 1.21 million square feet was absorbed in the third quarter alone.
And in more good news, vacancy rates in this sector continue to fall.
Newmark reported that the overall industrial vacancy rate for the Milwaukee market fell 26 basis points to 3.31 percent in the third quarter of this year. That’s down from 3.57 percent in the second quarter. A year ago? The industrial sector saw a vacancy rate of 4.14 percent in the Milwaukee market.
The average net asking rate for industrial space in the Milwaukee market hit $4.45 a square foot, compared to $4.38 a square foot during the second quarter.
A good chunk of this market’s positive absorption can be attributed to Milwaukee Electric Tool’s lease of 388,000 square feet in Menomonee Falls, Wisconsin, and SC Johnson’s lease of 198,696 square feet in Sturtevant, Wisconsin.
The Milwaukee market is also headed for more near-term growth. Newmark reported that 6.62 million square feet of industrial space is under construction with most of the new inventory being pre-leased or owner built.
The capital markets saw a strong third quarter in the Milwaukee area, too, with Briggs & Stratton’s 706,044-square-foot leased warehouse in the Germantown market trading for $47.75 million. Newmark also pointed to Quad Graphics, which closed a $33 million sale-leaseback of its 911,000-square-foot facility in West Allis, Wisconsin.
