Milwaukee Office Investment Forecast
Scant Pipeline and Leases at New Projects Help Shield Against Headwinds;
More Buyers Eye Reuse
Strong pre-leasing at new builds to help calm the storm. The office sector in Milwaukee was facing some challenges prior to the health crisis, and the shift to remote work during the pandemic exacerbated headwinds. Net absorption was negative in each of the past three years, with vacant stock growing by nearly 3.7 million square feet over that span. Conditions appear to be stabilizing, however, as the 90-basis-point rise in availability last year paled in comparison to the 380-basis-point lift across the previous two years. While the market is not projected to reclaim downward vacancy movement in 2022, the rate is expected to hold steady as completions fall to the lowest level since 2018 and four-fifths of the space set to deliver has a tenant commitment. The largest signing was by Rite-Hite, which is moving into a built-to-suit 158,000-square-foot headquarters in Walker's Point. West of here in Brookfield, actuarial and consulting firm Milliman will occupy 118,000 square feet at the newly constructed Golf Parkway Corporate Center. Leases like these signal a desire for new buildings, but a more substantial market recovery hinges on tenant demand returning to existing spaces.