If you’re driving through Milwaukee, don’t be surprised by all the construction cranes. According to the latest research report from Marcus & Millichap, construction crews will be building plenty of new apartment buildings in this city.
Marcus & Millichap’s second-quarter Milwaukee multifamily report said that developers will have added 3,220 apartment units to the market by the time this year ends. This will mark the largest number of new apartment units added in a single year since the recession.
For comparison, last year, developers completed just 1,530 new apartment units in the Milwaukee market.
The new units, though, do mean that the multifamily vacancy rate will probably increase. Marcus & Millichap is predicting that this rate will hit 3.2 percent by the end of the year. That is still low, but is 40 basis points higher than at the end of 2015.
But while vacancies will rise, so will rents. Marcus & Millichap said that the average effective apartment rent in the Milwaukee market will rise to $1,000 a month by the end of 2016. That is an increase of 3.6 percent from 2015, when the average apartment rent was $965 a month.
Marcus & Millichap said that rent increases were the most robust in the submarkets of Washington and Ozaukee counties and on the city’s Far North Side.