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Market Report

Milwaukee Office Investment Forecast

2020 Outlook

Initial Returns Above the National Average; Rising Vacancy Presents Short-Term Headwind

 

Downtown consolidation leaves behind unoccupied suburban spaces. Firms are placing a high priority on leasing office space in areas with an educated labor pool. This has brought a wave of tenants downtown east of the river, where access to the lakefront, Historic Third Ward and Riverwalk District provide the live-work-play environment that attracts young professionals. Here, the 163,000-square-foot Huron Building is underway, and law firm Husch Blackwell has pre-leased two-thirds of the space. Additionally, the BMO Tower will open nearby in early 2020 with a significant amount of pre-leased space. BMO Harris Bank will occupy 124,000 square feet of the tower as it consolidates multiple offices throughout the metro. As companies move into these newly built properties downtown, they are leaving behind smaller spaces in suburbs that need to be backfilled. Although leasing activity by financial institutions with an established market presence remains steady, the lack of new firms relocating to Milwaukee will create some headwinds. At the same time, roughly 856,000 square feet will be delivered this year, the largest volume since 2017, placing upward pressure on vacancy.

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