22 Apr 2016
April 22, 2016

Milwaukee Office MarketBeat Q1 2016

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ECONOMY

Wisconsin’s unemployment rate remained stable at 4.5% in March, down 0.1 percentage points (pp) from February, where it had remained unchanged for over a year. The 4.5% unemployment rate for Wisconsin remains lower than the national unemployment rate of 5.0%. The latest National Manpower Employment Outlook survey once again indicates positive prospects for job growth. Employers both nationally and locally included in the survey indicated that 22% are expecting hiring to increase in Q2 2016. The Milwaukee-Waukesha-West Allis market scored a 23% net employment outlook, a decrease from 28% from the second quarter of 2015. The net employment outlook is measured by percentage of plan hires offset by percentage of plan reduction in payroll.

q1 16 Milwaukee Office

 

MARKET OVERVIEW

The Milwaukee office market continued to report positive absorption in the first quarter of 2016. In Q1, the office market posted 338,654 square feet (sf) of positive absorption. The overall vacancy rate slightly decreased from the previous quarter at 18.2%, but marks a 0.6 pp decline from Q1 2015. The Milwaukee Class A CBD delivered a significant development in Q1 with the 833 East Building completed in March. The 358,017-sf building is currently 64.3% occupied, delivering 127,666 sf of vacant space to the marketplace. However, Milwaukee’s $1 billion in current development continues to attract more activity downtown. Associated Bank, the largest Wisconsin-headquartered bank, purchased the 378,000-sf Milwaukee Center tower as a means to expand their commitment to the city.  The landmark 28-story Milwaukee Center tower, the sixth largest multi-tenant office property in the downtown area, traded at $160 per square foot.

q1 16Overall Net Absorption

q1 16Overall Vacancy

OUTLOOK

This year started with positive growth throughout the metro area. As employment outlooks remain strong, expect vacancy to remain steady even as more product is delivered across the area. Downtown Milwaukee is becoming more attractive to tenants as it grows into a “15-to-18 hour” area where more housing is driving activity outside of the work day.

To download this report and view past Milwaukee MarketBeat reports for both Industrial and Office, head over to our Research page.