Home to six Fortune 500 companies, it’s safe to say the economy in Metro Milwaukee is thriving, and its strength in manufacturing and financial services is complemented by emerging sectors like water technology and energy, positioning the city as a regional innovation center. Based on a recent report by The Boerke Company, Inc., the unemployment rate dropped 40 basis points year-over-year to 2.7%, accompanied by a 0.3% employment increase.
Subsequently, the city’s office sector, too, is doing alright.
Overview
Q2 2023 brought a positive outlook to the sector, with nearly 48,000 square feet of net absorption, powered by the most leasing activity seen since early 2020. And although the overall vacancy rate saw a slight drop from the previous quarter, settling at 22.2%, it still marked a 110 basis point increase from the previous year.
Within the CBD, Q2 saw a negative absorption of -10,312 square feet. Key contributors were Roundy’s, vacating 27,568 square feet at 875 E. Wisconsin Ave., and the Republican National Committee leasing 24,000 square feet at the Associated Bank River Center for an upcoming political convention.
As for all other markets, positive absorption was a highlight during this period, marking the first such quarter since early 2022. Noteworthy players included Regal Ware, securing 17,938 square feet at One Park Plaza, and Novus Home Mortgage, with a 21,922-square-foot lease at Crossroads Corporate Center XII.
The rental scene also demonstrated resilience, with the overall rate nudging up to $22.09 per square foot, based on the report. Meanwhile, Class A properties shone, adding 28,336 square feet during this period, while Class B properties continued to face challenges, with a year-to-date net absorption rate of -68,957 square feet.
Outlook
According to The Boerke Company, the path ahead for Milwaukee’s office sector is a balancing act between challenges and opportunities. Although stability is evident in vacancy rates and rental prices, surplus inventory and limited economic growth hinder immediate progress.
