The industrial vacancy rate in Milwaukee hit its high point in 2011. Since then, the market has steadily improved, its vacancy rate tumbling 300 basis points.
And Marcus & Millichap, in its mid-year report, says that the Milwaukee industrial market should only grow stronger throughout 2017 and into 2018. Demand for industrial space in this market is high. Couple that with low taxes and business costs that are lower than other major cities, and you have the recipe for an industrial market that is set to expand steadily in the coming months.
The repurposing trend is strong here, too, with Marcus & Millichap saying that developers are turning older, outmoded urban warehouses into apartments or other uses. This is further reducing the amount of empty industrial space in the Milwaukee area.
Of course, certain areas are hotter than others. Marcus & Millichap points to suburban Waukesha County as one of the area’s strongest industrial submarkets. This area is blessed with an abundance of modern industrial space. And facilities here have access to all the major travel routes in and out of Milwaukee.
The numbers tell the story of just how strong Milwaukee is today as an indusrial hub. Marcus & Millichap reports that developers will add 636,000 square feet of new industrial product to the market this year, the highest amount of new construction since 2014. The company predicts, too, that the Milwaukee industrial market will end 2017 with a vacancy rate of 6.5 percent on the net absorption of 400,000 square feet of industrial space.
Asking rents should rise, too, with the report predicting that average asking rents will rise 3.7 percent in the Milwaukee industrial market to $3.66 a square foot. That is a solid increase from 2016’s 0.6 percent jump in asking rents.