16 Nov 2015
November 16, 2015

Milwaukee Office MarketBeat Q3 2015

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ECONOMY

Wisconsin’s unemployment rate declined to 4.5% for August, a decrease of 0.1 percentage point (pp) from the prior month and a 0.8 pp decrease from a year ago.  The 4.5% unemployment rate for Wisconsin remains lower than the national unemployment rate of 5.1%.  The latest National Manpower Employment Outlook survey indicates the strongest hiring plans since Q4 2007.  Locally, employers included in the survey indicated that 23% of employers anticipate hiring additional employees in the final quarter of 2015.  The Milwaukee-Waukesha-West Allis market scored a 20% net employment outlook, which represents a decrease from 27% in the previous quarter.  The national net employment outlook was 18%, an increase from the previous three quarters of 16%.  The net employment outlook is measured by percentage of plan hires offset by percentage of plan reduction in payroll.

Milwaukee Economy Office

MARKET OVERVIEW

Following an intermittent negative absorption for the second quarter 2015, the Milwaukee office market returned to positive absorption for the third quarter.  This quarter the office market posted a total of positive 121,389 square feet (sf).  The overall vacancy decreased to 18.4%, a 1.6 pp decrease from the previous quarter, and 1.2 pp decline from Q3 2014.  The renewed interest in downtown space continues to be heightened in construction plans.  A former retail warehouse in close proximity to the new Milwaukee Bucks arena site has plans to be converted into 50,000 sf of office space.  Schlitz Park, a downtown business park, also announced plans to convert a former warehouse into 50,000 sf of office space.  Furthermore, Schlitz Park anticipates further expansion resulting in 80,000 sf of additional office space.  Zurn Industries announced plans it is joining Milwaukee’s upcoming water research park by relocating its global headquarters to the 3rd Ward and building a $15-million, 50,000-sf office building.

Office - Net Absorption

Office - Overall Vacancy

 

OUTLOOK

The end of 2015 looks to carry on with positive growth as the office market continues to expand.  Global economic indicators are displaying mixed signals, while local construction activity is on the rise.  Developers are remaining optimistic of the space in close proximity to downtown.

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