Milwaukee
OFFICE MARKET REPORT
Milwaukee 4th Quarter 2016 2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
Table of Contents/ Methodology of Tracked Set Xceligent is a leading provider of verified commercial real estate information which assists real estate professionals, appraisers, owners, investors and developers that make strategic decisions to lease, sell, buy and develop commercial properties.
Table of Contents/Methodology of Tracked Set
2
Office Market Map
3
Milwaukee Office Overview Statistics by Market
4-5 6
Vacancy Rates & Asking Rents
7-8
Leasing & Sales Activity
9-10
New Construction
11
Office Advisory Board Members
12
Xceligent Milwaukee Team
13
The Milwaukee tracked set consists of an inventory of buildings considered to be competitive within the brokerage community. All buildings within the competitive tracked set have been reviewed and verified by members of the Advisory Boards for each market area. Inventory
The total square feet (sf) of all existing single and multi tenant office buildings greater than 20,000 sf, excluding medical, government and owner occupied buildings.
Class A
Most prestigious buildings competing for premier office users with rents above the market average. Buildings have high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.
Class B
Buildings competing for a wide range of office users with average market rents. Building finishes are fair to good for the area and systems are adequate, but the property does not compete with Class A product.
Total Available (sf) All of the available leasable space within a building, whether it is occupied or vacant, for direct lease or sublease space. Space can be available but not vacant, for example, if the landlord, or his agent, is marketing space that will be coming available at a future date because a tenant is planning to move.
Total Vacant (sf)
The total of all of the vacant square footage within a building, including both direct and sublease space.
Direct Vacant (sf)
The total of the vacant square footage in a building that is being marketed by an agent representing the landlord.
Sublease (sf)
Space that is offered for lease by a current tenant, or his agent, within a property.
Net Absorption
The net change in occupancy from quarter to quarter, expressed in square feet.
Weighted Average The weighted average of all asking rents expressed as a full service/gross rental rate and weighted on total available square feet. Non-full service rates (such as NNN) have been grossed up to reflect a full service/gross rate. Asking Rents 2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
2
Office Market Map
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
3
Milwaukee Office Overview
Overview
During 4Q 2016, the Milwaukee office market saw the overall vacancy rate decrease by 30 basis points to 16.7%, down 90 basis points from 4Q 2015. This is reflected in the overall health of the market and the optimism tenants have as they move and/or expand operations.
The quarterly net absorption posted 52,817 square feet (sf), bringing the year-to-date total to just over 638,000 sf. The positive net gain is due primarily to the completion of two large office developments - 833 East in the Downtown East submarket, and the Meadowlands Research and Technology Center in Wauwatosa.
The weighted average asking rents for the Milwaukee market continue to rise, ending the year at $19.55 FSG, up $0.14 per sf from last quarter and $0.46 from 4Q 2015. This is fueled by new office developments and a perceived lack of supply.
Though down from the start of 2016, new construction gains momentum as market conditions improve, ending the year with 137,500 sf of new space under way. Several projects are expected to break ground over the next year, including One Catalano Square in the Third Ward, BMO Harris Bank's new office tower in downtown Milwaukee, and Hammes Co. headquarters, also planned for downtown Milwaukee.
# of Bldgs
Inventory (sf)
Total Vacancy Rate (%)
Quarterly Net Absorption (sf)
YTD Net Absorption (sf)
A
131
12,654,338
2,266,031
1,907,943
15.1%
-13,054
388,517
B
255
14,398,078
3,454,940
2,698,529
18.7%
61,888
230,619
C
23
1,127,184
179,417
91,988
8.2%
3,983
19,644
409
28,179,600
5,900,388
4,698,460
16.7%
52,817
638,780
Overall
# of Bldgs
Inventory (sf)
Direct Available (sf)
Direct Vacant (sf)
Direct Direct Quarterly YTD Direct Net Vacancy Rate Absorption (sf) Absorption (sf) (%)
A
131
12,654,338
2,189,681
1,884,824
14.9%
-13,054
371,531
B
255
14,398,078
3,223,719
2,510,458
17.4%
61,888
230,619
C
23
1,127,184
169,205
81,776
7.3%
3,983
17,144
409
28,179,600
5,582,605
4,477,058
15.9%
52,817
619,294
Overall
# of Bldgs
Overall
Total Available (sf) Total Vacant (sf)
Inventory (sf)
Sublease Available (sf)
Sublease Sublease YTD Sublease Net Sublease Vacant (sf) Vacancy Rate Quarterly Absorption (sf) (%) Absorption (sf)
A
131
12,654,338
76,350
23,119
0.2%
-
16,986
B
255
14,398,078
231,221
188,071
1.3%
-
-
C
23
1,127,184
10,212
10,212
0.9%
-
2,500
409
28,179,600
317,783
221,402
0.8%
-
19,486
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
4
Milwaukee Office Overview
Historical Vacancy Rate & Net Absorption Absorption
Vacancy
500,000
17.8% 17.6%
400,000
17.4%
17.2%
300,000
17.0% 200,000
16.8% 16.6%
100,000
16.4%
-
16.2% 4Q 2015
1Q 2016
2Q 2016
3Q 2016
4Q 2016
Historical Vacancy Rates by Class A
24.00%
B
C
21.00% 18.00% 15.00% 12.00% 9.00% 6.00% 3.00%
0.00% 4Q 2015
1Q 2016
2Q 2016
3Q 2016
4Q 2016
Historical Net Absorption by Class A
350,000
B
C
300,000 250,000 200,000 150,000 100,000 50,000 (50,000)
4Q 2015
1Q 2016
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
2Q 2016
3Q 2016
4Q 2016
5
Statistics by Market
# of Bldgs
Milwaukee Northwest A B C Downtown West A B West Allis B C Downtown East A B C Mayfair/ Wauwatosa A B C Third Ward/ Walker's Point A B C North Shore A B C Southeast B Southwest A B West B C Waukesha Brookfield A B C Waukesha/ Pewaukee A B New Berlin/ Muskego B West B C Ozaukee Ozaukee A B Overall
Inventory (sf)
Total Vacant (sf)
Sublease Vacant Total Vacancy Rate (sf) (%)
Total Qtrly Net Absorption (sf)
YTD Total Net Absorption (sf)
235 20 10 9 1 21 4 17 18 16 2 46 11 30 5
20,978,813 1,793,768 1,064,984 695,341 33,443 2,964,015 925,257 2,038,758 1,950,447 1,862,548 87,899 7,009,096 4,628,610 2,159,826 220,660
3,552,171 384,362 160,239 210,337 13,786 498,258 293,064 205,194 102,502 102,502 1,135,378 580,495 545,871 9,012
203,402 160,035 6,967 153,068 16,712 13,000 3,712
16.9% 21.4% 15.0% 30.2% 41.2% 16.8% 31.7% 10.1% 5.3% 5.5% 0.0% 16.2% 12.5% 25.3% 4.1%
48,911 8,741 8,741 -570 -570 4,165 4,165 -10,792 -22,154 12,862 -1,500
615,060 111,486 62,725 48,761 14,831 1,412 13,419 29,511 29,511 193,439 163,194 30,545 -300
43
2,752,808
664,230
20,155
24.1%
32,885
163,830
15 25 3
1,426,296 1,244,857 81,655
301,520 345,166 17,544
16,152 4,003 -
21.1% 27.7% 21.5%
29,869 3,016 -
109,191 55,380 -741
28
1,926,350
287,797
6,500
14.9%
-2,250
46,787
3 21 4 38 6 31 1 8 8 11 7 4 2 1 1 139 89 34 50 5
264,664 1,364,011 297,675 1,738,604 450,732 1,279,015 8,857 265,910 265,910 288,885 185,711 103,174 288,930 65,721 223,209 6,626,176 4,118,389 1,978,730 1,997,873 141,786
47,681 203,598 36,518 297,086 32,515 264,571 124,776 124,776 57,782 26,908 30,874 1,106,965 679,277 247,293 425,384 6,600
6,500 18,000 18,000 18,000 -
18.0% 14.9% 12.3% 17.1% 7.2% 20.7% 0.0% 46.9% 46.9% 20.0% 14.5% 29.9% 0.0% 0.0% 0.0% 16.7% 16.5% 12.5% 21.3% 4.7%
-1,282 -2,268 1,300 14,962 14,962 1,770 1,770 3,404 6,423 -18,772 21,012 4,183
2,731 39,190 4,866 42,694 9,452 31,453 1,789 2,237 2,237 10,245 8,745 1,500 10,638 91,457 58,234 19,193 14,030
46
2,331,838
400,276
-
17.2%
-3,019
-68,841
24 22
1,369,458 962,380
203,027 197,249
-
14.8% 20.5%
-455 -2,564
-30,447 -38,394
2
121,676
18,884
-
15.5%
-
-11,978
2 2 1 1 35 35 17 18 409
121,676 54,273 22,273 32,000 574,611 574,611 359,896 214,715 28,179,600
18,884 8,528 8,528 39,324 39,324 15,201 24,123 4,698,460
221,402
15.5% 15.7% 0.0% 26.7% 6.8% 6.8% 4.2% 11.2% 16.7%
502 502 -2,030 2,532 52,817
-11,978 13,082 13,082 3,280 9,802 638,780
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
6
Vacancy Rates & Asking Rents
Milwaukee Northwest A B C Downtown West A B C West Allis A B C Downtown East A B C Mayfair/Wauwatosa A B C Third Ward/Walker's Point A B C North Shore A B C Southeast A B C Southwest A B C West A B C Waukesha Brookfield A B C Waukesha/Pewaukee A B C New Berlin/Muskego A B C West A B C Ozaukee Ozaukee A B C Overall
4Q 2015 18.1% 27.6% 20.9% 37.3% 41.2% 19.4% 31.8% 12.7% 6.8% 7.1% 14.6% 9.0% 26.7% 3.9% 26.1% 20.5% 32.2% 20.6%
Vacancy Rate % 1Q 2016 2Q 2016 17.4% 17.6% 22.8% 20.6% 12.8% 12.8% 37.3% 31.5% 41.2% 41.2% 17.1% 17.8% 32.0% 31.7% 9.0% 11.6% 5.9% 5.8% 6.1% 6.1% 15.5% 16.8% 11.0% 13.2% 26.1% 26.0% 3.9% 2.5% 25.5% 25.3% 19.9% 21.1% 31.6% 30.4% 20.6% 20.6%
3Q 2016 17.5% 21.9% 15.0% 31.5% 41.2% 16.8% 31.7% 10.0% 5.5% 5.7% 16.0% 12.1% 25.9% 3.4% 25.3% 23.2% 28.0% 21.5%
4Q 2016 16.9% 21.4% 15.0% 30.2% 41.2% 16.8% 31.7% 10.1% 5.3% 5.5% 16.2% 12.5% 25.3% 4.1% 24.1% 21.1% 27.7% 21.5%
4Q 2015 $19.54 $20.15 $21.59 $18.41 $11.00 $15.52 $15.00 $15.61 $17.46 $17.46 $24.06 $24.84 $22.09 $18.01 $21.06 $16.61 $15.35
Weighted Average Asking Rent (FSG) 1Q 2016 2Q 2016 3Q 2016 $19.78 $19.99 $19.64 $19.66 $20.07 $20.06 $21.43 $21.57 $21.33 $18.41 $18.74 $18.80 $11.00 $11.00 $11.00 $13.88 $13.84 $14.01 $15.00 $15.00 $15.00 $13.61 $13.56 $13.78 $17.25 $17.20 $17.20 $17.25 $17.20 $17.20 $25.04 $24.95 $25.55 $25.96 $25.99 $26.72 $22.27 $22.04 $22.00 $18.09 $18.12 $18.08 $21.82 $22.18 $22.25 $16.42 $16.43 $16.48 $15.35 $15.35 $13.71
4Q 2016 $19.81 $20.71 $21.33 $18.85 $13.95 $15.00 $13.67 $17.17 $17.17 $25.70 $26.90 $21.82 $18.95 $22.56 $17.43 $13.71
13.8%
13.2%
11.9%
14.8%
14.9%
$19.07
$19.50
$19.91
$13.10
$12.93
19.0% 12.7% 13.9% 23.1% 9.3% 28.0% 20.2% 47.8% 47.8% 23.5% 19.2% 31.4% 16.7% 18.4% 14.9% 22.2% 14.6% 14.2% 12.6% 16.5% 5.7% 5.7% 15.7% 26.7% 9.1% 9.1% 5.1% 15.8% 17.6%
21.4% 11.3% 13.9% 22.9% 8.4% 28.1% 47.5% 47.5% 23.5% 19.2% 31.4% 17.8% 18.3% 13.4% 23.7% 11.1% 17.2% 14.4% 21.3% 15.5% 15.5% 15.7% 26.7% 9.3% 9.3% 4.6% 17.4% 17.4%
17.9% 10.2% 14.1% 22.3% 7.2% 27.8% 48.4% 48.4% 22.4% 17.4% 31.4% 16.8% 17.2% 11.2% 23.6% 9.5% 16.4% 13.8% 20.1% 15.5% 15.5% 15.7% 26.7% 8.9% 8.9% 4.6% 16.1% 17.3%
17.5% 14.8% 12.7% 21.5% 7.2% 26.7% 46.9% 46.9% 20.6% 15.4% 29.9% 16.6% 16.4% 11.0% 22.3% 7.6% 17.0% 14.8% 20.2% 15.5% 15.5% 15.7% 26.7% 6.9% 6.9% 3.7% 12.4% 17.0%
18.0% 14.9% 12.3% 17.1% 7.2% 20.7% 46.9% 46.9% 20.0% 14.5% 29.9% 16.7% 16.5% 12.5% 21.3% 4.7% 17.2% 14.8% 20.5% 15.5% 15.5% 15.7% 26.7% 6.8% 6.8% 4.2% 11.2% 16.7%
$18.72 $19.46 $16.09 $14.89 $20.59 $14.31 $16.00 $15.10 $15.10 $18.51 $18.75 $16.00 $18.46 $18.48 $20.40 $17.06 $14.45 $18.41 $22.14 $15.07 $18.35 $18.35 $18.50 $18.50 $14.23 $14.23 $16.47 $11.77 $19.09
$19.18 $19.90 $16.09 $14.75 $20.83 $14.33 $15.10 $15.10 $18.51 $18.75 $16.00 $18.84 $19.12 $21.28 $17.21 $13.55 $18.30 $22.41 $15.04 $18.35 $18.35 $18.43 $18.00 $18.50 $14.66 $14.66 $16.77 $12.26 $19.39
$19.93 $19.97 $14.00 $14.79 $20.74 $14.33 $15.42 $15.42 $18.49 $18.75 $16.00 $19.04 $19.33 $21.39 $17.45 $15.00 $18.53 $22.53 $15.03 $18.35 $18.35 $18.50 $18.50 $14.72 $14.72 $16.77 $12.40 $19.59
$22.05 $10.88 $14.00 $14.90 $20.74 $14.46 $15.33 $15.33 $17.14 $17.14 $19.12 $19.38 $21.64 $17.21 $15.00 $18.72 $22.31 $15.05 $18.35 $18.35 $18.50 $18.50 $14.96 $14.96 $16.73 $12.51 $19.41
$21.78 $11.31 $14.96 $20.76 $14.54 $15.36 $15.36 $17.13 $17.14 $17.00 $19.18 $19.55 $21.83 $17.20 $15.00 $18.62 $22.05 $15.49 $18.35 $18.35 $18.50 $18.50 $14.66 $14.66 $17.20 $12.51 $19.55
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
7
Vacancy Rates & Asking Rents
Vacancy Rate by Market 16.9%
16.7%
6.8%
Milwaukee
Waukesha
Ozaukee
Weighted Average Asking Rents by Market (FSG) $19.81
$19.18
$14.66
Milwaukee
Waukesha
Ozaukee
Asking Rent Range by Class (FSG) $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $-
$36.00
$23.00
$23.62
$18.50
$16.18
$15.45
$10.00
$13.00
$4.50 A
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
B
C 8
Leasing & Sales Activity
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
9
Leasing & Sales Activity
Largest Absorption Changes
Occupied or Vacated (sf)
Property Name
Tenant Name
Market
Building Class
Oakwood Center
17,528 Medical College of Wisconsin
Milwaukee
A
The Forum
11,704 Multiple Tenants
Milwaukee
B
500 W Brown Deer Rd
11,508 MSI Data
Milwaukee
B
Meadowland Research & Technology Center
11,267 Quest Continuing Education
Milwaukee
A
9,768 Multiple Tenants
Milwaukee
B
-6,600 Multiple Tenants
Milwaukee
B
Two-Fifty Monterey Park Bldg E 300 N Patrick Blvd
-11,362 Opus Capital Markets Consultants
Waukesha
A
The ASQ Center
-17,336 Multiple Tenants
Milwaukee
B
325 N Corporate Dr
-19,391 Multiple Tenants
Waukesha
A
100 East Building
-31,163 PwC & Wells Fargo
Milwaukee
A
Top Transactions
Property Name
Sale Price
Sold (sf)
Buyer
Goerkes Park Business Center
$3,050,000
31,752 Edward Jones Financial
2717 N Grandview Blvd
$2,250,000
30,408
228 S 1st St
$1,100,000
43,400 David Winograd
Granville Professional Building
$770,000
33,443
Engineered Products & Services Inc.
Wisconsin Blackstone Real Estate
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
Seller
Market
Building Class
Richard Stone
Waukesha
B
Synergy Property Management
Waukesha
B
Canvas Corner Inc.
Milwaukee
B
Frank Kaldis
Milwaukee
C
10
New Construction
Current Construction by Market 120,000 110,000
100,000
80,000
60,000
40,000 27,500 20,000
Downtown East
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
Third Ward/Walker's Point
11
Office Advisory Board Members
Milwaukee Office
Research
Anderson Commercial Group Steffi Hahn
Katie Gremban The Boerke Company
William Bonifas
Gard Pecor
CBRE Jim Cavanaugh
Christian Hunter CBRE
John Mazza Lyle Landowski
Ryan Rasmussen Colliers Margaret Bruckner
Colliers Dan Wroblewski David Pudlosky
JLL Kyle Koeller NAI MLG Commercial Nathan Winkel
JLL Michael Streit Tim Janusz NAI MLG Commercial Jack Jacobson RFP Commercial Ned Purtell Transwestern Dan Walsh The Boerke Company Andrew Jensen
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
12
Xceligent Milwaukee Team
This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy. For more information, please contact :
Josh Parrish
Director of Analytics
(414) 416-7092
[email protected]
Sales Executives
(949) 306-8767
[email protected]
Brian Reece
Regional VP of Analytics
(919) 829-9627
[email protected]
Greg Hayden
Regional VP of Sales
(816) 303-2822
[email protected]
James Bertolli
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
13
Milwaukee 4th Quarter 2016 2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
Table of Contents/ Methodology of Tracked Set Xceligent is a leading provider of verified commercial real estate information which assists real estate professionals, appraisers, owners, investors and developers that make strategic decisions to lease, sell, buy and develop commercial properties.
Table of Contents/Methodology of Tracked Set
2
Office Market Map
3
Milwaukee Office Overview Statistics by Market
4-5 6
Vacancy Rates & Asking Rents
7-8
Leasing & Sales Activity
9-10
New Construction
11
Office Advisory Board Members
12
Xceligent Milwaukee Team
13
The Milwaukee tracked set consists of an inventory of buildings considered to be competitive within the brokerage community. All buildings within the competitive tracked set have been reviewed and verified by members of the Advisory Boards for each market area. Inventory
The total square feet (sf) of all existing single and multi tenant office buildings greater than 20,000 sf, excluding medical, government and owner occupied buildings.
Class A
Most prestigious buildings competing for premier office users with rents above the market average. Buildings have high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.
Class B
Buildings competing for a wide range of office users with average market rents. Building finishes are fair to good for the area and systems are adequate, but the property does not compete with Class A product.
Total Available (sf) All of the available leasable space within a building, whether it is occupied or vacant, for direct lease or sublease space. Space can be available but not vacant, for example, if the landlord, or his agent, is marketing space that will be coming available at a future date because a tenant is planning to move.
Total Vacant (sf)
The total of all of the vacant square footage within a building, including both direct and sublease space.
Direct Vacant (sf)
The total of the vacant square footage in a building that is being marketed by an agent representing the landlord.
Sublease (sf)
Space that is offered for lease by a current tenant, or his agent, within a property.
Net Absorption
The net change in occupancy from quarter to quarter, expressed in square feet.
Weighted Average The weighted average of all asking rents expressed as a full service/gross rental rate and weighted on total available square feet. Non-full service rates (such as NNN) have been grossed up to reflect a full service/gross rate. Asking Rents 2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
2
Office Market Map
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
3
Milwaukee Office Overview
Overview
During 4Q 2016, the Milwaukee office market saw the overall vacancy rate decrease by 30 basis points to 16.7%, down 90 basis points from 4Q 2015. This is reflected in the overall health of the market and the optimism tenants have as they move and/or expand operations.
The quarterly net absorption posted 52,817 square feet (sf), bringing the year-to-date total to just over 638,000 sf. The positive net gain is due primarily to the completion of two large office developments - 833 East in the Downtown East submarket, and the Meadowlands Research and Technology Center in Wauwatosa.
The weighted average asking rents for the Milwaukee market continue to rise, ending the year at $19.55 FSG, up $0.14 per sf from last quarter and $0.46 from 4Q 2015. This is fueled by new office developments and a perceived lack of supply.
Though down from the start of 2016, new construction gains momentum as market conditions improve, ending the year with 137,500 sf of new space under way. Several projects are expected to break ground over the next year, including One Catalano Square in the Third Ward, BMO Harris Bank's new office tower in downtown Milwaukee, and Hammes Co. headquarters, also planned for downtown Milwaukee.
# of Bldgs
Inventory (sf)
Total Vacancy Rate (%)
Quarterly Net Absorption (sf)
YTD Net Absorption (sf)
A
131
12,654,338
2,266,031
1,907,943
15.1%
-13,054
388,517
B
255
14,398,078
3,454,940
2,698,529
18.7%
61,888
230,619
C
23
1,127,184
179,417
91,988
8.2%
3,983
19,644
409
28,179,600
5,900,388
4,698,460
16.7%
52,817
638,780
Overall
# of Bldgs
Inventory (sf)
Direct Available (sf)
Direct Vacant (sf)
Direct Direct Quarterly YTD Direct Net Vacancy Rate Absorption (sf) Absorption (sf) (%)
A
131
12,654,338
2,189,681
1,884,824
14.9%
-13,054
371,531
B
255
14,398,078
3,223,719
2,510,458
17.4%
61,888
230,619
C
23
1,127,184
169,205
81,776
7.3%
3,983
17,144
409
28,179,600
5,582,605
4,477,058
15.9%
52,817
619,294
Overall
# of Bldgs
Overall
Total Available (sf) Total Vacant (sf)
Inventory (sf)
Sublease Available (sf)
Sublease Sublease YTD Sublease Net Sublease Vacant (sf) Vacancy Rate Quarterly Absorption (sf) (%) Absorption (sf)
A
131
12,654,338
76,350
23,119
0.2%
-
16,986
B
255
14,398,078
231,221
188,071
1.3%
-
-
C
23
1,127,184
10,212
10,212
0.9%
-
2,500
409
28,179,600
317,783
221,402
0.8%
-
19,486
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
4
Milwaukee Office Overview
Historical Vacancy Rate & Net Absorption Absorption
Vacancy
500,000
17.8% 17.6%
400,000
17.4%
17.2%
300,000
17.0% 200,000
16.8% 16.6%
100,000
16.4%
-
16.2% 4Q 2015
1Q 2016
2Q 2016
3Q 2016
4Q 2016
Historical Vacancy Rates by Class A
24.00%
B
C
21.00% 18.00% 15.00% 12.00% 9.00% 6.00% 3.00%
0.00% 4Q 2015
1Q 2016
2Q 2016
3Q 2016
4Q 2016
Historical Net Absorption by Class A
350,000
B
C
300,000 250,000 200,000 150,000 100,000 50,000 (50,000)
4Q 2015
1Q 2016
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
2Q 2016
3Q 2016
4Q 2016
5
Statistics by Market
# of Bldgs
Milwaukee Northwest A B C Downtown West A B West Allis B C Downtown East A B C Mayfair/ Wauwatosa A B C Third Ward/ Walker's Point A B C North Shore A B C Southeast B Southwest A B West B C Waukesha Brookfield A B C Waukesha/ Pewaukee A B New Berlin/ Muskego B West B C Ozaukee Ozaukee A B Overall
Inventory (sf)
Total Vacant (sf)
Sublease Vacant Total Vacancy Rate (sf) (%)
Total Qtrly Net Absorption (sf)
YTD Total Net Absorption (sf)
235 20 10 9 1 21 4 17 18 16 2 46 11 30 5
20,978,813 1,793,768 1,064,984 695,341 33,443 2,964,015 925,257 2,038,758 1,950,447 1,862,548 87,899 7,009,096 4,628,610 2,159,826 220,660
3,552,171 384,362 160,239 210,337 13,786 498,258 293,064 205,194 102,502 102,502 1,135,378 580,495 545,871 9,012
203,402 160,035 6,967 153,068 16,712 13,000 3,712
16.9% 21.4% 15.0% 30.2% 41.2% 16.8% 31.7% 10.1% 5.3% 5.5% 0.0% 16.2% 12.5% 25.3% 4.1%
48,911 8,741 8,741 -570 -570 4,165 4,165 -10,792 -22,154 12,862 -1,500
615,060 111,486 62,725 48,761 14,831 1,412 13,419 29,511 29,511 193,439 163,194 30,545 -300
43
2,752,808
664,230
20,155
24.1%
32,885
163,830
15 25 3
1,426,296 1,244,857 81,655
301,520 345,166 17,544
16,152 4,003 -
21.1% 27.7% 21.5%
29,869 3,016 -
109,191 55,380 -741
28
1,926,350
287,797
6,500
14.9%
-2,250
46,787
3 21 4 38 6 31 1 8 8 11 7 4 2 1 1 139 89 34 50 5
264,664 1,364,011 297,675 1,738,604 450,732 1,279,015 8,857 265,910 265,910 288,885 185,711 103,174 288,930 65,721 223,209 6,626,176 4,118,389 1,978,730 1,997,873 141,786
47,681 203,598 36,518 297,086 32,515 264,571 124,776 124,776 57,782 26,908 30,874 1,106,965 679,277 247,293 425,384 6,600
6,500 18,000 18,000 18,000 -
18.0% 14.9% 12.3% 17.1% 7.2% 20.7% 0.0% 46.9% 46.9% 20.0% 14.5% 29.9% 0.0% 0.0% 0.0% 16.7% 16.5% 12.5% 21.3% 4.7%
-1,282 -2,268 1,300 14,962 14,962 1,770 1,770 3,404 6,423 -18,772 21,012 4,183
2,731 39,190 4,866 42,694 9,452 31,453 1,789 2,237 2,237 10,245 8,745 1,500 10,638 91,457 58,234 19,193 14,030
46
2,331,838
400,276
-
17.2%
-3,019
-68,841
24 22
1,369,458 962,380
203,027 197,249
-
14.8% 20.5%
-455 -2,564
-30,447 -38,394
2
121,676
18,884
-
15.5%
-
-11,978
2 2 1 1 35 35 17 18 409
121,676 54,273 22,273 32,000 574,611 574,611 359,896 214,715 28,179,600
18,884 8,528 8,528 39,324 39,324 15,201 24,123 4,698,460
221,402
15.5% 15.7% 0.0% 26.7% 6.8% 6.8% 4.2% 11.2% 16.7%
502 502 -2,030 2,532 52,817
-11,978 13,082 13,082 3,280 9,802 638,780
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
6
Vacancy Rates & Asking Rents
Milwaukee Northwest A B C Downtown West A B C West Allis A B C Downtown East A B C Mayfair/Wauwatosa A B C Third Ward/Walker's Point A B C North Shore A B C Southeast A B C Southwest A B C West A B C Waukesha Brookfield A B C Waukesha/Pewaukee A B C New Berlin/Muskego A B C West A B C Ozaukee Ozaukee A B C Overall
4Q 2015 18.1% 27.6% 20.9% 37.3% 41.2% 19.4% 31.8% 12.7% 6.8% 7.1% 14.6% 9.0% 26.7% 3.9% 26.1% 20.5% 32.2% 20.6%
Vacancy Rate % 1Q 2016 2Q 2016 17.4% 17.6% 22.8% 20.6% 12.8% 12.8% 37.3% 31.5% 41.2% 41.2% 17.1% 17.8% 32.0% 31.7% 9.0% 11.6% 5.9% 5.8% 6.1% 6.1% 15.5% 16.8% 11.0% 13.2% 26.1% 26.0% 3.9% 2.5% 25.5% 25.3% 19.9% 21.1% 31.6% 30.4% 20.6% 20.6%
3Q 2016 17.5% 21.9% 15.0% 31.5% 41.2% 16.8% 31.7% 10.0% 5.5% 5.7% 16.0% 12.1% 25.9% 3.4% 25.3% 23.2% 28.0% 21.5%
4Q 2016 16.9% 21.4% 15.0% 30.2% 41.2% 16.8% 31.7% 10.1% 5.3% 5.5% 16.2% 12.5% 25.3% 4.1% 24.1% 21.1% 27.7% 21.5%
4Q 2015 $19.54 $20.15 $21.59 $18.41 $11.00 $15.52 $15.00 $15.61 $17.46 $17.46 $24.06 $24.84 $22.09 $18.01 $21.06 $16.61 $15.35
Weighted Average Asking Rent (FSG) 1Q 2016 2Q 2016 3Q 2016 $19.78 $19.99 $19.64 $19.66 $20.07 $20.06 $21.43 $21.57 $21.33 $18.41 $18.74 $18.80 $11.00 $11.00 $11.00 $13.88 $13.84 $14.01 $15.00 $15.00 $15.00 $13.61 $13.56 $13.78 $17.25 $17.20 $17.20 $17.25 $17.20 $17.20 $25.04 $24.95 $25.55 $25.96 $25.99 $26.72 $22.27 $22.04 $22.00 $18.09 $18.12 $18.08 $21.82 $22.18 $22.25 $16.42 $16.43 $16.48 $15.35 $15.35 $13.71
4Q 2016 $19.81 $20.71 $21.33 $18.85 $13.95 $15.00 $13.67 $17.17 $17.17 $25.70 $26.90 $21.82 $18.95 $22.56 $17.43 $13.71
13.8%
13.2%
11.9%
14.8%
14.9%
$19.07
$19.50
$19.91
$13.10
$12.93
19.0% 12.7% 13.9% 23.1% 9.3% 28.0% 20.2% 47.8% 47.8% 23.5% 19.2% 31.4% 16.7% 18.4% 14.9% 22.2% 14.6% 14.2% 12.6% 16.5% 5.7% 5.7% 15.7% 26.7% 9.1% 9.1% 5.1% 15.8% 17.6%
21.4% 11.3% 13.9% 22.9% 8.4% 28.1% 47.5% 47.5% 23.5% 19.2% 31.4% 17.8% 18.3% 13.4% 23.7% 11.1% 17.2% 14.4% 21.3% 15.5% 15.5% 15.7% 26.7% 9.3% 9.3% 4.6% 17.4% 17.4%
17.9% 10.2% 14.1% 22.3% 7.2% 27.8% 48.4% 48.4% 22.4% 17.4% 31.4% 16.8% 17.2% 11.2% 23.6% 9.5% 16.4% 13.8% 20.1% 15.5% 15.5% 15.7% 26.7% 8.9% 8.9% 4.6% 16.1% 17.3%
17.5% 14.8% 12.7% 21.5% 7.2% 26.7% 46.9% 46.9% 20.6% 15.4% 29.9% 16.6% 16.4% 11.0% 22.3% 7.6% 17.0% 14.8% 20.2% 15.5% 15.5% 15.7% 26.7% 6.9% 6.9% 3.7% 12.4% 17.0%
18.0% 14.9% 12.3% 17.1% 7.2% 20.7% 46.9% 46.9% 20.0% 14.5% 29.9% 16.7% 16.5% 12.5% 21.3% 4.7% 17.2% 14.8% 20.5% 15.5% 15.5% 15.7% 26.7% 6.8% 6.8% 4.2% 11.2% 16.7%
$18.72 $19.46 $16.09 $14.89 $20.59 $14.31 $16.00 $15.10 $15.10 $18.51 $18.75 $16.00 $18.46 $18.48 $20.40 $17.06 $14.45 $18.41 $22.14 $15.07 $18.35 $18.35 $18.50 $18.50 $14.23 $14.23 $16.47 $11.77 $19.09
$19.18 $19.90 $16.09 $14.75 $20.83 $14.33 $15.10 $15.10 $18.51 $18.75 $16.00 $18.84 $19.12 $21.28 $17.21 $13.55 $18.30 $22.41 $15.04 $18.35 $18.35 $18.43 $18.00 $18.50 $14.66 $14.66 $16.77 $12.26 $19.39
$19.93 $19.97 $14.00 $14.79 $20.74 $14.33 $15.42 $15.42 $18.49 $18.75 $16.00 $19.04 $19.33 $21.39 $17.45 $15.00 $18.53 $22.53 $15.03 $18.35 $18.35 $18.50 $18.50 $14.72 $14.72 $16.77 $12.40 $19.59
$22.05 $10.88 $14.00 $14.90 $20.74 $14.46 $15.33 $15.33 $17.14 $17.14 $19.12 $19.38 $21.64 $17.21 $15.00 $18.72 $22.31 $15.05 $18.35 $18.35 $18.50 $18.50 $14.96 $14.96 $16.73 $12.51 $19.41
$21.78 $11.31 $14.96 $20.76 $14.54 $15.36 $15.36 $17.13 $17.14 $17.00 $19.18 $19.55 $21.83 $17.20 $15.00 $18.62 $22.05 $15.49 $18.35 $18.35 $18.50 $18.50 $14.66 $14.66 $17.20 $12.51 $19.55
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
7
Vacancy Rates & Asking Rents
Vacancy Rate by Market 16.9%
16.7%
6.8%
Milwaukee
Waukesha
Ozaukee
Weighted Average Asking Rents by Market (FSG) $19.81
$19.18
$14.66
Milwaukee
Waukesha
Ozaukee
Asking Rent Range by Class (FSG) $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $-
$36.00
$23.00
$23.62
$18.50
$16.18
$15.45
$10.00
$13.00
$4.50 A
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B
C 8
Leasing & Sales Activity
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
9
Leasing & Sales Activity
Largest Absorption Changes
Occupied or Vacated (sf)
Property Name
Tenant Name
Market
Building Class
Oakwood Center
17,528 Medical College of Wisconsin
Milwaukee
A
The Forum
11,704 Multiple Tenants
Milwaukee
B
500 W Brown Deer Rd
11,508 MSI Data
Milwaukee
B
Meadowland Research & Technology Center
11,267 Quest Continuing Education
Milwaukee
A
9,768 Multiple Tenants
Milwaukee
B
-6,600 Multiple Tenants
Milwaukee
B
Two-Fifty Monterey Park Bldg E 300 N Patrick Blvd
-11,362 Opus Capital Markets Consultants
Waukesha
A
The ASQ Center
-17,336 Multiple Tenants
Milwaukee
B
325 N Corporate Dr
-19,391 Multiple Tenants
Waukesha
A
100 East Building
-31,163 PwC & Wells Fargo
Milwaukee
A
Top Transactions
Property Name
Sale Price
Sold (sf)
Buyer
Goerkes Park Business Center
$3,050,000
31,752 Edward Jones Financial
2717 N Grandview Blvd
$2,250,000
30,408
228 S 1st St
$1,100,000
43,400 David Winograd
Granville Professional Building
$770,000
33,443
Engineered Products & Services Inc.
Wisconsin Blackstone Real Estate
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
Seller
Market
Building Class
Richard Stone
Waukesha
B
Synergy Property Management
Waukesha
B
Canvas Corner Inc.
Milwaukee
B
Frank Kaldis
Milwaukee
C
10
New Construction
Current Construction by Market 120,000 110,000
100,000
80,000
60,000
40,000 27,500 20,000
Downtown East
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
Third Ward/Walker's Point
11
Office Advisory Board Members
Milwaukee Office
Research
Anderson Commercial Group Steffi Hahn
Katie Gremban The Boerke Company
William Bonifas
Gard Pecor
CBRE Jim Cavanaugh
Christian Hunter CBRE
John Mazza Lyle Landowski
Ryan Rasmussen Colliers Margaret Bruckner
Colliers Dan Wroblewski David Pudlosky
JLL Kyle Koeller NAI MLG Commercial Nathan Winkel
JLL Michael Streit Tim Janusz NAI MLG Commercial Jack Jacobson RFP Commercial Ned Purtell Transwestern Dan Walsh The Boerke Company Andrew Jensen
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
12
Xceligent Milwaukee Team
This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy. For more information, please contact :
Josh Parrish
Director of Analytics
(414) 416-7092
[email protected]
Sales Executives
(949) 306-8767
[email protected]
Brian Reece
Regional VP of Analytics
(919) 829-9627
[email protected]
Greg Hayden
Regional VP of Sales
(816) 303-2822
[email protected]
James Bertolli
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
13
