The office sector in Madison, Wisconsin, ended last year on a positive note, its overall vacancy rate falling on a year-over-year basis.
That was the good news from Cushman & Wakefield‘s fourth-quarter Madison office Marketbeat report.
According to Cushman & Wakefield, Madison’s overall office vacancy rate stood at 10.8% as of the end of the fourth quarter of last year. That’s 10 basis points down from the same quarter last year.
That vacancy rate is also within the Madison market’s office vacancy range of 9% to 11% since early 2021, according to Cushman & Wakefield.
In another positive, Cushman & Wakefield reported that the Madison office market saw positive net absorption in the fourth quarter of 2024 for the first time in 2024. According to the Marketbeat report, the Madison office market recorded 11,492 square feet of positive absorption
That was a good sign. But it wasn’t enough to result in positive net absorption for the year. Cushman & Wakefield reported that the Madison office market registered negative absorption of 271,399 square feet in 2024.
The region’s Northwest/Middleton submarket ended 2024 with the highest office vacancy rate, 16.1%. That was driven by large vacant spaces, according to Cushman & Wakefield. This submarket registered negative office space absorption of 177,255 square feet in 2024.
The Madison market saw 62 office lease transactions in the fourth quarter totaling 180,139 square feet. That brought the year-end office lease total to 627,607 square feet, a dip of 23.7% from the office leasing activity in 2023.
In a better sign, the fourth quarter saw a 29.1% increase in new office leasing activity when compared to the third quarter. Cushman & Wakefield said that users occupying smaller spaces — from 2,000 to 5,000 square feet — remained the most active in the Madison office leasing market.
What does the future hold for the Madison office market? No one can predict that. But Cushman & Wakefield in its report said that leasing activity for larger office spaces could increase in 2025 as new users seek traditional office space. Cushman & Wakefield pointed to data center users looking to lease quality office space in traditional buildings.
