Wisconsin’s unemployment rate at 6.3% , continues to beat out the national unemployment rate by 0.7 percentage points according to the Bureau of Labor Statistics’ preliminary data. Wisconsin has a positive outlook for the coming year, as unemployment is down and revenue is up. Recently, over 30 businesses announced large economic development projects within the State of Wisconsin. These projects are expected to generate $1.9 billion in revenue and 6.2 million square feet (msf) of development as well as to create more than 6,900 new jobs for the Wisconsin economy. The Milwaukee-area manufacturing sector continued to show positive results in December and positive market conditions are anticipated to continue throughout the coming year. The Institute of Supply Management scored Milwaukee at 54.0 for December 2013, indicating positive growth. A score in excess of 50 indicates growth as a measure of new orders, production, employment, supplier deliveries and inventories in the manufacturing industry.
CONTINUED POSITIVE ABSORPTION
For the 14th consecutive quarter, the Milwaukee industrial market experienced positive absorption. At year-end 2013, Milwaukee saw 3.4msf of positive absorption, with Q4 2013 posting 977,000 square feet (sf) absorbed. Waukesha County saw the largest absorption figures in Q4 2013, with over 582,000 sf, followed by Milwaukee County with over 230,000 sf. In addition to positive absorption, the vacancy rate continued to decline, with Q4 2013 posting a slight decrease to 6.7%, marking a 0.3-percentage-point decrease year-over-year.
INVESTMENT ACTIVITY ON THE RISE
Over the past year, industrial investment activity increased 72% , from just under 2.0 msf in 2012 to 3.4 msf at the end of 2013. Major acquisitions introduced two new investors into the Wisconsin market. Biynah Industrial Partners recently acquired five assets for a total portfolio price of $15.6 million and Blackstone Group/IndCor Real Estate acquired two assets for $13.3 million. Notable transactions included Zilber’s acquisition of 10000 S. Franklin Drive, Franklin, a 246,000-sf building leased to Baptista’s Bakery, Stag Industrial, Inc.’s acquisition of 5600 S. Moorland Road, New Berlin, a facility leased to Quad Graphics Inc., and Brennan Investment Group’s acquisition of a 120,000-sf facility at 975 Cottonwood, Hartland leased to Dorner Manufacturing Corp.
Anticipate continued growth in the manufacturing and industrial sector through 2014. Manufacturing has always been a strong suit for the Milwaukee area, and with Wisconsin “open for business,” more focus has been set on attracting and retaining businesses than ever before. From investing in workforce development to growing the economy through structural reforms, more businesses currently located within Wisconsin are taking advantage of incentives and are focusing on expansion. Wisconsin is also bringing in businesses located out of state with an inviting economic and political environment. Expect more big wins ahead in 2014.
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