A steady increase in the number of new households and lower apartment rents are combining to create a bright future for Milwaukee’s multifamily market.
The fourth-quarter Milwuakee multifamily report released by Marcus & Millichap predicts that by the time this year ends, 3,800 new apartment units will have been added to the supply in the Milwaukee metropolitan area. That is a significant increase from last year’s 2,000 new units.
The area’s downtown/Shorewood submarket will end the year as the busiest, according to Marcus & Millichap. The CRE firm says that 1,466 new units will have been added to this submarket by the end of the year.
This new construction will result in an increase in vacancy. Marcus & Millichap says that apartment vacancy rates throughout the metropolitan Milwaukee area will rise by 40 basis points to 3.6 percent by the end of the year. This isn’t a bad sign, though, considering the large number of new apartments built this year.
Even while apartment vacancies rise, rents will increase, Marcus reports. Thanks to stout rental demand, the average effective rent will hit $1,040 a month in the Milwaukee area, an increase of 3.5 percent from 2016.
Developers aren’t slowing down in Milwaukee, with several large apartment projects currently underway. A 274-door apartment project is now under construction in the Wauwatosa submarket at 926 W. Juneau Ave. The two largest apartment projects under construction are downtown, though: 777 N. Van Buren St. with 322 apartments and The Couture with 302 units.