December 22, 2025
2025 was an up-and-down year for the national economy, but in southeast Wisconsin the story was more balanced, and in several key areas, genuinely encouraging. Most business leaders we talk to across the M7 region would describe the year as “slower, more selective, but still moving.” Cap X project announcements from large companies boomed in 2025, and overall business sentiment improved in the back half of the year as interest-rate cuts came into view and major projects moved from announcement to construction.
Higher interest rates, elevated construction costs, and tighter lending standards created friction. Global tariff discussions and trade tensions added another layer of uncertainty. But for many manufacturers and industrial occupiers, tariff pressure is effectively another nudge toward onshoring, simpler supply chains, and locations that can support long-term capital investment, an area where Wisconsin is increasingly competitive.
Policy momentum: OBBB and capital formation
On the policy front, the OBBB, signed in July, permanently restored 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025. For capital-intensive users like manufacturing, the depreciation change materially improves after-tax returns on new facilities and equipment and serves as an additional carrot for making things in America with the tariff stick looming large.
In Wisconsin, divided government can present an unexpected upside for the business community: it makes major policy swings hard to pull off. In today’s political climate, that gridlock can actually create a level of consistency. Big changes are slow, surprises are rare, and the rules of the game don’t get rewritten every two years.
Sector performance: real projects behind the headlines
Office, retail, multifamily, and mixed-use saw plenty of negative national headlines in 2025, but on the ground in our region, there were meaningful wins.
Office / mixed-use. Downtown Milwaukee continues to attract long-term corporate capital. Northwestern Mutual’s $500 million overhaul of its 18-story North Office Building moved visibly forward this year. The new glass façade is complete, signage is installed, and interior build-out is underway, with employees expected to occupy the building in 2027. That project is part of a broader downtown campus strategy that will consolidate jobs from Franklin and reinforce Northwestern Mutual’s commitment to the city’s core.
Fiserv’s move of its headquarters to HUB640, along with earlier relocations by firms like Enerpac Tool Group and Allspring Global Investments from the suburbs into the Downtown, continued to reshape the tenant mix toward higher-value, headquarter-quality office users. At the same time, obsolete office stock is being right-sized: the underused 100 East tower is being converted into 373 apartments , and the Sentinel Building is slated for an apartment conversion as well. Both examples of older assets being repurposed into uses that better match current demand.
Retail. In retail, capital is clearly flowing to the best-located assets. The Corners of Brookfield announced a $167 million expansion, including a $27 million overhaul of its Market Street retail corridor and the planned West End phase with 40,000 SF of new retail and 278 luxury apartments. New-to-market brands like Alo Yoga are joining the lineup, while successful tenants such as Evereve are expanding their footprints.
Legacy properties are being repositioned as well. Brookfield Square is slated for a new Brookfield Public Market concept in the former Boston Store box—roughly 2.1 acres reimagined to house about a dozen food and retail operators focused on local entrepreneurs. In Brown Deer, Target is anchoring a 23-acre redevelopment with a 128,000 SF store and planned apartments and outlots, transforming a high-vacancy center into a new mixed-use node. In Oak Creek, Buc-ee’s is moving ahead with its first Wisconsin location, a 73,000+ SF travel center along the I-94 corridor. And in Racine, Regency Mall’s long-struggling Boston Store wing has already been demolished and converted into a new Woodman’s grocery store, with additional mixed-use redevelopment on the table.
These projects illustrate a clear pattern: capital and tenants are concentrating in walkable, well-located, experience-driven environments, many of them right here in Southeast Wisconsin.
Multifamily. Wisconsin’s multifamily segment moved from short-term oversupply toward improved balance in 2025. Early in the year, a wave of Class A deliveries created rent concessions and slowed growth, but steady job gains and household formation helped stabilize occupancy and restore modest rent increases by mid-year.
Investment activity also strengthened. Transaction velocity rebounded after a soft Q1, and by year-end the market had recorded roughly the same number of sales as 2024, but with meaningfully higher dollar volume—approximately $1.0 billion compared to $762 million last year. Dane County continues to demonstrate pricing power, highlighted by a 674-unit, $83 million Fitchburg trade early in the year at a sub-4% cap rate.
With new supply moderating and capital focusing on value-add and well-located assets, fundamentals appear positioned to continue firming into 2026.
The AI, power, and digital infrastructure wave
The largest headlines in 2025 centered on AI and power-intensive digital infrastructure. Microsoft’s AI data center campus in Mount Pleasant now represents more than $7 billion in current and planned investment and has firmly repositioned Racine County as a national data center hub. Vantage Data Centers’ “Lighthouse” campus in Port Washington, developed in partnership with OpenAI and Oracle, is a $15+ billion multi-phase investment, backed by a multi-year construction pipeline.
Equally important are the local companies expanding to support this ecosystem. Global Power Components, Generac, Engendren, and Banker Wire to name a few, are strengthening their positions in the data center and grid-adjacent supply chain—expanding capacity and leaning into Wisconsin’s role as a power and infrastructure manufacturing center.
Advanced manufacturing and life sciences: a deep bench
Beyond AI, Southeast Wisconsin posted one of its strongest years for advanced manufacturing and life-science commitments:
- Eli Lilly – Kenosha County: Approximately $4 billion for a new biopharmaceutical manufacturing campus and at least 700 projected jobs.
- Yaskawa America – Franklin: Roughly $180 million in investment and 700+ jobs tied to advanced automation.
- GE HealthCare – Waukesha/West Milwaukee: More than $100 million in modernization and a new customer experience center
- Rockwell Automation –SE Wisconsin: Advancing plans for a 1 million-square-foot campus expansion in the Region , a major strategic consolidation that reinforces Wisconsin as Rockwell’s long-term engineering and manufacturing hub.
These are not speculative plays; they’re long-horizon bets from global leaders and industries that our workforce is uniquely qualified to grow.
Looking ahead: challenging year, strong foundation
2025 delivered its share of headwinds. Rate volatility, construction inflation, selective capital, and pockets of oversupply in certain segments. But when you step back and look at what actually got committed and advanced this year, the picture is much stronger than the day-to-day noise suggests.
Southeast Wisconsin landed tens of billions of dollars in AI infrastructure, manufacturing, life sciences, and retail/mixed-use reinvestment. Federal tax policy has swung back toward rewarding capital formation. Tariff and reshoring dynamics are nudging more production and supply chain activity closer to end customers.
From our vantage point at Cushman & Wakefield | Boerke, the conclusion is straightforward: 2025 was a challenging year in many respects, but the commitments put in place over the past 12 months have strengthened the foundation for a Southeast Wisconsin commercial real estate market with fundamentally sound long-term prospects.