A banner year. That’s how JLL referred to the Milwaukee industrial market’s 2023, when net absorption in this sector reached nearly 3 million square feet and more than 2.7 million square feet of new industrial space was delivered.
Both of those figures were record highs for the Milwaukee market.
But what about 2024? JLL predicts a similarly strong year for the Milwaukee-area industrial market.
Those are the highlights from JLL’s 2023 fourth quarter Milwaukee industrial report that the firm released this week.
But industrial professionals working this market shouldn’t be surprised by a slight slowdown in the sector. JLL says that it does not expect industrial absorption in 2024 to reach the highs it reached last year. That, though, is mostly because of an expected lack of new product hitting the market in 2024. Industrial construction slowed near the end of 2023, and that means fewer deliveries this year.
But brokers should be ready for more sales activity this year. JLL predicts that industrial transaction volume should increase in the Milwaukee market in 2024 thanks to the Federal Reserve Board’s decision to forego any new hikes in its benchmark interest rate.
JLL reported that tenants making industrial moves are seeking newer product, with more than 90% of the Milwaukee area’s net absorption last year coming in buildings that were built since 2000.
While last year saw plenty of new industrial construction, this will drop off in 2024. JLL reports that there is only 1.4 million square feet of industrial product currently in production in the Milwaukee market.
The average asking rental rate for industrial product built since 2000 is $5.53 a square foot. The average asking rent in general at the end of last year stood at a lower $4.61 a square foot, showing that older products are generating significantly less rent than are newer facilities.
