Much like the rest of the U.S., Milwaukee’s industrial sector tells a tale of strong demand, tight space, and economic shifts. Still, the market has maintained its strength during Q3, with a consistent demand from various users of different sizes seeking available space, according to a recent report by JLL.
The biggest challenge lies in the 50,000 to 100,000 square foot range, where a scarcity of viable options and increasing rental rates have left occupants struggling to secure suitable spaces, whether for renewals or relocations.
On the other hand, users in need of 100,000 square feet or more have found some relief due to recent plant closures, particularly for those seeking Class B and C spaces. While there have been a few recent additions of high-quality modern bulk spaces, the overall supply remains limited, based on the report, with only 1.4 million square feet currently under construction, including Transwestern’s Building B on Brown Deer Road.
Notably, JLL reports that rising interest rates and the current economic climate have constrained new construction projects which will affect the supply over the next 12 to 18 months, likely resulting in a further decrease in the vacancy rate as expanding companies absorb existing properties.
In terms of the outlook, the market has proven its resilience in the past year, driven by ongoing leasing activity. That said, the primary obstacle to additional absorption and leasing remains the insufficient available product. With a lack of new deliveries expected in the coming year, JLL anticipates a further decrease in the vacancy rate and an increase in rental rates, particularly for high-quality modern bulk spaces.
Access the full report here.
