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Market Report

Madison Industrial Market Report

Second Half 2018

Construction Pipeline Rapidly Expanding; Investor Interest Robust, Though Listings Tight

 

Expanding retail sales predicate need for more industrial space. This year in Madison, household income is expected to rise strongly, pushing the market median to nearly $75,000. Climbing income will in turn propel retail sales 6.0 percent on an annual basis, intensifying the need for distribution centers and warehouses as retailers attempt to place their products near one of the state’s most populous areas. In 2017, Madison recorded more than 600,000 square feet in completions, the highest delivery total in more than a decade. Though construction efforts cool in 2018, several projects will come to fruition. This year’s largest completion is a 138,000-square-foot warehouse in the Center for Industry and Commerce, an area close to Dane County Regional Airport. Space demand in this part of the metro is typically strong due to quick airport access as well as close proximity to I-90. In fact, Madison’s overall demand is relatively robust, supporting a sub-5 percent vacancy rate by year end thanks to a notable expected drop. Rents should witness considerable gains as a result, driving rental rates near $6 per square foot.

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