Metro Milwaukee Office Market Review 2017 Q3

Transcription

1 Metro Milwaukee Office Market Review RETAIL OFFICE INDUSTRIAL LAND INVESTMENT NAI MLG COMMERCIAL N BROADWAY, SUITE 700, MILWAUKEE, WI MLGCOMMERCIAL.COM

2 Absorption SF Metro Milwaukee Office Market Report Year-over-Year Changes 36 vs. 37 NET ABSORPTION 200, , ,000 50,000 - (50,000) AVAILABILITY 27 vs. 37 AVAILABILITY VACANCY Quarter-over-Quarter Changes NET ABSORPTION VACANCY ASKING S ASKING S Absorption & Availablity Table of Contents Pg 2 - Metro Milwaukee Snapshot Pg 4 - Metro Milwaukee Current Statistics Pg 6 - Metro Milwaukee Historical Trends Pg 8 - Central Business District Analysis Pg 10 - Suburban Markets Analysis Pg Individual Submarkets Analysis Pg 34 NAI MLG Office Team 24.0% 23.0% 22.0% 21.0% 20.0% 19.0% Availablity % (100,000) 18.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 2

3 Milwaukee Metro Stats Significant Lease Transactions Property City Tenant Size SF Mercantile Building Millwaukee Digital Mesures 22, N Mayfair Rd Wauwatosa Athletico 10, N Mayfair Rd Wauwatosa Orthopedic Institute 9,573 Significant Sale Transactions Snapshot Class / Quarter Inventory (SF) Available (SF) Availability Rate (%) Quarterly Absorption Absorption Class A 5,344, , % 19, ,092 Class B 24,028,266 5,610, % (63,752) (73,603) Class C 2,150, , % 22,369 15,245 31,523,695 6,696, % (21,709) 48,734 31,492,055 6,738, % 73,832 70,443 31,494,139 6,595, % (3,389) (3,389) 31,797,716 6,760, % (55,717) 331,827 Property City Buyer Size SF Price BMO Harris Tower Milwaukee Irgens 280,511 $7,100,000 BMO ExecutiveDr Portfolio Brookfield SunTrust Robinson 195,221 $40,300, S 2nd St Milwaukee 507 South 2nd Street 80,000 $3,510,000 Significant Absorption Changes Positive Absorption Changes Negative Absorption Changes Property Absorption Property Absorption The Mercantile Building 27, N Lydell Ave (107,000) 3077 N Mayfair Rd 17,849 CityCenter at 735 (17,969) Renaissance on the Water 16, W Watertown Rd (8,061) The Steinmeyer Building 9,007 Milwaukee Center Office Tower (7,286) Chase Tower 8,000 The Fairview Building (7,142) Sky Plaza I 7,640 The Forum (6,354) The 100 East Building 7,077 One Park Plaza (5,771) 222 E Erie St 6,878 The Matthews Building at 301 (5,083) Milwaukee, Wisconsin Page 3

4 Metro Milwaukee Office Market Report Central Business District Availability: 2,453,741 Qtrly Absorption: 49,933 YTD Absorption: 101,825 Downtown East Availability: 1,402,483 Qtrly Absorption: (3,765) YTD Absorption: 42,883 Downtown West Availability: 657,499 Qtrly Absorption: 3,574 YTD Absorption: 14,105 3rd Ward & Walkers Point Availability: 393,759 Qtrly Absorption: 50,124 YTD Absorption: 44,837 Park Place Availability: 696,638 Qtrly Absorption: (4,396) YTD Absorption: (53,005) North Shore Availability: 610,390 Qtrly Absorption: (99,005) YTD Absorption: (95,984) Ocnomowoc / Lake Country Availability: 89,352 Qtrly Absorption: 1,223 YTD Absorption: (594) Pewaukee Availability: 485,700 Qtrly Absorption: 3,514 YTD Absorption: 27,422 Brookfield Availability: 1,207,878 Qtrly Absorption: 9,837 YTD Absorption: 23,569 Wauwatosa Availability: 696,598 Qtrly Absorption: 19,022 YTD Absorption: 53,370 West Allis Availability: 276,671 Qtrly Absorption: (6,407) YTD Absorption: (14,901) Airport Availability: 184,919 Qtrly Absorption: 4,570 YTD Absorption: 7,032 Milwaukee, Wisconsin Page 4

5 Milwaukee Metro Stats Current Stats Suburban Submarkets Central Business District Submarket Building Count Total RBA (SF) Available (SF) Available (%) Quarterly Absorption (SF) YTD Absorption (SF) Downtown East Class A 8 3,593, , % 9,066 48,882 Class B&C 40 4,007, , % (12,831) (5,999) Total 48 7,600,384 1,402, % (3,765) 42,883 Downtown West Class B & C 26 3,294, , % 3,574 14,105 Total 26 3,294, , % 3,574 14,105 3rd Ward & Walkers Point Class B & C 34 1,984, , % 50,124 44,837 Total 34 1,984, , % 50,124 44,837 CBD Total ,879,628 2,453, % 49, ,825 Airport Class B & C , , % 4,570 7,032 Total , , % 4,570 7,032 Brookfield Class A 4 314,493 53, % 6,513 4,259 Class B & C 122 5,112,061 1,154, % 3,324 19,310 Total 126 5,426,554 1,207, % 9,837 23,569 North Shore Class B & C 83 2,465, , % (99,005) (95,984) Total 83 2,465, , % (99,005) (95,984) Oconomowoc/Lake Country Class B & C ,424 89, % 1,223 (594) Total ,424 89, % 1,223 (594) Park Place Class B & C 26 1,856, , % (4,396) (53,005) Total 26 1,856, , % (4,396) (53,005) Pewaukee Class A 4 372,433 50, % - (3,709) Class B & C 43 1,715, , % 3,514 31,131 Total 47 2,088, , % 3,514 27,422 Wauwatosa Class A 8 1,064, , % 4,095 57,660 Class B&C 55 2,218, , % 14,927 (4,290) Total 63 3,282, , % 19,022 53,370 West Allis Class B & C 34 2,204, , % (6,407) (14,901) Total 34 2,204, , % (6,407) (14,901) Suburban Total ,664,035 4,248, % (71,642) (53,091) Grand Total ,543,663 6,701, % (21,709) 48,734 Milwaukee, Wisconsin Page 5

6 Metro Milwaukee Office Market Report Historic Availability 7,600, % 7,400, % 7,200,000 7,000,000 6,800,000 6,600,000 6,400, % 22.50% 22.00% 21.50% 21.00% 20.50% 6,200, % 6,000, % 1Q 2Q 3Q 4Q 1Q 2Q 3Q Total Avail SF 3 yr. Trailing Average 1 yr. Trailing Average Building Class Availability 30% CBD vs Suburban Availability 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% A B&C 0% CBD Suburban Milwaukee, Wisconsin Page 6

7 Trends Historic Absorption 200, % 150, ,000 50, % 1.0% - 0.0% (50,000) (100,000) (150,000) -1.0% -2.0% (200,000) -3.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q Quarterly Absorption (SF) Annual Growth Rate Building Class Absorption 300, , , , ,000 50,000 - (50,000) (100,000) CBD vs Suburban Absorption 300, , , , ,000 50,000 - (50,000) (100,000) (150,000) (150,000) A B&C CBD Suburban Milwaukee, Wisconsin Page 7

8 Metro Milwaukee Central Business District TOTAL CLASS A CLASS B&C # OFFICE BUILDINGS MARKET SIZE (SF) 12,879,628 3,593,367 9,286,261 AVAILABLITY (SF) 2,453, ,215 1,964,526 AVAILABLITY (%) 19.1% 13.6% 21.2% VACANCY (SF) 1,851, ,767 1,479,641 VACANCY (%) 14.4% 10.3% 15.9% 17 ABSORPTION 49,933 9,066 40,867 ABSORPTION 101,825 48,882 52,943 Year-over-Year Changes 36 vs. 37 Class B&C Occupied SF Class A Available SF Downtown East Submarket Class A Occupied SF Class B&C Available SF Class A Available SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 200, , ,000 50,000 - (50,000) (100,000) 22.0% 21.0% 20.0% 19.0% 18.0% 17.0% 16.0% (150,000) 15.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 8

9 YTD CBD Absorption MKE CBD Positive Absorption Negative Absorption Milwaukee, Wisconsin Page 9

10 Metro Milwaukee Suburban TOTAL CLASS A CLASS B&C # OFFICE BUILDINGS MARKET SIZE (SF) 12,879,628 1,751,202 16,912,833 AVAILABLITY (SF) 2,453, ,522 3,951,624 AVAILABLITY (%) 19.1% 16.9% 23.4% VACANCY (SF) 1,851, ,776 2,982,363 VACANCY (%) 14.4% 11.4% 17.6% 17 ABSORPTION 49,933 10,608 (82,250) ABSORPTION 101,825 58,210 (111,301) Year-over-Year Changes 36 vs. 37 Class B&C Occupied SF Class A Available SF Class A Occupied SF Class B&C Available SF Class A Available SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 300, , , , ,000 50,000 - (50,000) (100,000) (150,000) 30.0% 28.0% 26.0% 24.0% 22.0% 20.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 10

11 YTD Suburban Absorption Mayfair Rd, Wauwatosa MKE Suburban Bluemound Rd, Brookfield Pewaukee Rd, Pewaukee Positive Absorption Negative Absorption Milwaukee, Wisconsin Page 11

12 Metro Milwaukee Downtown East TOTAL CLASS A CLASS B&C # OFFICE BUILDINGS MARKET SIZE (SF) 7,600,384 3,593,367 4,007,017 AVAILABLITY (SF) 1,402, , ,268 AVAILABLITY (%) 18.5% 13.6% 22.8% VACANCY (SF) 1,164, , ,857 VACANCY (%) 15.3% 10.3% 19.8% 17 ABSORPTION (3,765) 9,066 (12,831) ABSORPTION 42,883 48,882 (5,999) Year-over-Year Changes 36 vs. 37 Class B&C Occupied SF Class A Available SF Downtown East Submarket Class A Occupied SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Class B&C Available SF Availability & Absorption 200, , ,000 50,000 - (50,000) (100,000) 20.0% 18.0% 16.0% 14.0% 12.0% (150,000) 10.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 12

13 Office Occupancy Downtown East Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 13

14 Metro Milwaukee Downtown West TOTAL # OFFICE BUILDINGS CLASS B&C MARKET SIZE (SF) 3,294,482 3,294,482 AVAILABLITY (SF) 657, ,499 AVAILABLITY (%) 20.0% 20.0% VACANCY (SF) 499, ,253 VACANCY (%) 15.2% 15.2% 17 ABSORPTION 3,574 3,574 ABSORPTION 14,105 14,105 Year-over-Year Changes 36 vs. 37 Downtown East Submarket Class B&C Occupied SF Class B&C Available SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Class B&C Available SF Availability & Absorption 60,000 40,000 20,000 - (20,000) (40,000) 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% (60,000) 0.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 14

15 Office Occupancy Downtown West Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 15

16 Metro Milwaukee 3rd Ward & Walkers Point TOTAL # OFFICE BUILDINGS CLASS B&C MARKET SIZE (SF) 1,984,762 1,984,762 AVAILABLITY (SF) 393, ,759 AVAILABLITY (%) 19.8% 19.8% VACANCY (SF) 187, ,531 VACANCY (%) 9.4% 9.4% 17 ABSORPTION 50,124 50,124 ABSORPTION 44,837 44,837 Year-over-Year Changes 36 vs. 37 Downtown East Submarket Class B&C Available SF Class B&C Occupied SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 70,000 60,000 50, % 25.0% 40, % 30,000 20,000 10, % 10.0% 5.0% (10,000) 0.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 16

17 Office Occupancy 3rd & 5th Wards Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 17

18 Metro Milwaukee Airport TOTAL # OFFICE BUILDINGS CLASS B&C MARKET SIZE (SF) 692, ,842 AVAILABLITY (SF) 184, ,919 AVAILABLITY (%) 26.7% 26.7% VACANCY (SF) 170, ,622 VACANCY (%) 24.6% 24.6% 17 ABSORPTION 4,570 4,570 ABSORPTION 7,032 7,032 Year-over-Year Changes 36 vs. 37 Class B&C Occupied SF Downtown East Submarket Class B&C Available SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 70, % 60,000 50,000 40,000 30, % 25.0% 20.0% 20,000 10,000 - (10,000) 15.0% 10.0% 5.0% (20,000) 0.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 18

19 Office Occupancy Airport Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 19

20 Metro Milwaukee Brookfield TOTAL CLASS A CLASS B&C # OFFICE BUILDINGS MARKET SIZE (SF) 5,426, ,493 5,112,061 AVAILABLITY (SF) 1,207,878 53,724 1,154,154 AVAILABLITY (%) 22.3% 17.1% 22.6% VACANCY (SF) 840,709 25, ,413 VACANCY (%) 15.5% 8.0% 16.0% 17 ABSORPTION 9,837 6,513 3,324 ABSORPTION 23,569 4,259 19,310 Year-over-Year Changes 36 vs. 37 Class B&C Occupied SF Class A Occupied SF Class A Available SF Downtown East Submarket Class B&C Available SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 160, , , ,000 80,000 60,000 40,000 20,000 - (20,000) (40,000) (60,000) 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 20

21 Office Occupancy Brookfield Crossroads Corporate Park Brookfield Lakes Executive Dr Bishops Woods Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 21

22 Metro Milwaukee North Shore TOTAL # OFFICE BUILDINGS CLASS B&C MARKET SIZE (SF) 2,465,536 2,465,536 AVAILABLITY (SF) 610, ,390 AVAILABLITY (%) 24.8% 24.8% VACANCY (SF) 518, ,905 VACANCY (%) 21.0% 21.0% 17 ABSORPTION (99,005) (99,005) ABSORPTION (95,984) (95,984) Year-over-Year Changes 36 vs. 37 Class B&C Occupied SF Downtown East Submarket Class B&C Available SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 40, % 20,000 - (20,000) (40,000) (60,000) (80,000) (100,000) 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% (120,000) 0.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 22

23 Office Occupancy Port Washington Rd, Ozaukee County North Shore Port Washington Rd, Milwaukee County Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 23

24 Metro Milwaukee Oconomowoc/Lake Country TOTAL # OFFICE BUILDINGS CLASS B&C MARKET SIZE (SF) 647, ,424 AVAILABLITY (SF) 89,352 89,352 AVAILABLITY (%) 13.8% 13.8% VACANCY (SF) 54,059 54,059 VACANCY (%) 8.3% 8.3% 17 ABSORPTION 1,223 1,223 ABSORPTION (594) (594) Year-over-Year Changes 36 vs. 37 Downtown East Submarket Class B&C Available SF Class B&C Occupied SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 15,000 10,000 5,000 - (5,000) (10,000) (15,000) (20,000) Quarterly Absorption Total Available % 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Milwaukee, Wisconsin Page 24

25 Office Occupancy Oconomowoc/ Lake Country Hwy 83, Delafield Downtown Delafield Hwy 67, Oconomowoc Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 25

26 Metro Milwaukee Park Place TOTAL # OFFICE BUILDINGS CLASS B&C MARKET SIZE (SF) 1,856,883 1,856,883 AVAILABLITY (SF) 696, ,638 AVAILABLITY (%) 37.5% 37.5% VACANCY (SF) 465, ,527 VACANCY (%) 25.1% 25.1% 17 ABSORPTION (4,396) (4,396) ABSORPTION (53,005) (53,005) Class B&C Available SF Year-over-Year Changes 36 vs. 37 Class B&C Occupied SF Downtown East Submarket NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 100,000 50,000 - (50,000) (100,000) (150,000) (200,000) Quarterly Absorption Total Available % 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Milwaukee, Wisconsin Page 26

27 Office Occupancy Park Place Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 27

28 Metro Milwaukee Pewaukee TOTAL CLASS A CLASS B&C # OFFICE BUILDINGS MARKET SIZE (SF) 2,088, ,433 1,715,643 AVAILABLITY (SF) 485,700 50, ,806 AVAILABLITY (%) 23.3% 13.7% 25.3% VACANCY (SF) 388,282 38, ,417 VACANCY (%) 18.6% 10.4% 20.4% 17 ABSORPTION 3,514-3,514 ABSORPTION 27,422 (3,709) 31,131 Year-over-Year Changes 36 vs. 37 Downtown East Submarket Class B&C Occupied SF Class A Available SF Class A Occupied SF Class B&C Available SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 50, % 40,000 30,000 20, % 20.0% 10, % - (10,000) (20,000) 10.0% 5.0% (30,000) 0.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 28

29 Office Occupancy Pewaukee Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 29

30 Metro Milwaukee Wauwatosa TOTAL CLASS A CLASS B&C # OFFICE BUILDINGS MARKET SIZE (SF) 3,282,719 1,064,276 2,218,443 AVAILABLITY (SF) 696, , ,694 AVAILABLITY (%) 21.2% 18.0% 22.7% VACANCY (SF) 548, , ,234 VACANCY (%) 16.7% 12.7% 18.6% 17 ABSORPTION 19,022 4,095 14,927 ABSORPTION 53,370 57,660 (4,290) Year-over-Year Changes 36 vs. 37 Downtown East Submarket Class B&C Occupied SF Class A Available SF Class B&C Available SF Class A Occupied SF Class A Available SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 120, % 100,000 80,000 60, % 20.0% 40, % 20,000 - (20,000) 10.0% 5.0% (40,000) 0.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 30

31 Office Occupancy Wauwatosa Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 31

32 Metro Milwaukee West Allis TOTAL # OFFICE BUILDINGS CLASS B&C MARKET SIZE (SF) 2,204,001 2,204,001 AVAILABLITY (SF) 276, ,671 AVAILABLITY (%) 12.6% 12.6% VACANCY (SF) 195, ,186 VACANCY (%) 8.9% 8.9% 17 ABSORPTION (6,407) (6,407) ABSORPTION (14,901) (14,901) Year-over-Year Changes 36 vs. 37 Downtown East Submarket Class B&C Occupied SF Class B&C Available SF NET ABSORPTION AVAILABILITY VACANCY ASKING S Availability & Absorption 15,000 10, % 5, % (5,000) (10,000) 10.0% (15,000) (20,000) 5.0% (25,000) 0.0% Quarterly Absorption Total Available % Milwaukee, Wisconsin Page 32

33 Office Occupancy West Allis Hwy 100, West Allis 60th St, West Allis Forest Home Ave, Hales Corners Occupied SF Available SF Vacant SF Milwaukee, Wisconsin Page 33

34 NAI MLG Commercial Office Team Jack Jacobson Principal Tim Janusz Senior Vice President Rachel Schmidt, CCIM Senior Vice President Karen Johnson, CCIM Senior Vice President Mitchell Bastien Sales Associate Featured Listings 207Featured Transactions Mercantile Building Milwaukee One Riverwood Place Pewaukee up to 12,182 SF Available $23.00 NNN Lease Rate High profile corner in the Third Ward. Modern expansion recently completed W North Ave Brookfield Capitol Dr (Hwy 190) 16,982 SF Leased Robert W Baird & Co renewed their lease SWC Hwy 190 & Hwy 164 Pewaukee up to 14,844 SF Available Negotiable Lease Rate $3.75M Sale Price Built in using state of the art HVAC and lighting. Hwy Acres Sold $3.5 Million Dollars Sommerstone LLC plans on developing retail center Milwaukee, Wisconsin Page 34

35 Methodology: The report includes multi-tenant office buildings 10,000 SF or larger within each of the defined submarkets. Excluded are government buildings, medical office buildings, owneroccupied buildings and buildings that are under a long-term lease. Class A: A classification used to describe buildings that generally qualify as extremely desirable, investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted, Net Absorption includes direct and sublease space. Rentable Building Area (RBA): The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Availablity Rate: A measurement expressed as a percentage of the total amount of available space divided by the total amount of existing inventory space. Under construction space generally is not included in available calculations. Deliveries: Buildings that complete construction during a specified period of time. In order for space to be delivered, a certificate of occupancy must have been issued for the property. 1 Year Trailing Average: Average of the previous four quarters, including the current quarter. 3 Year Trailing Average: Average of the previous twelve quarters, including the current quarter. Milwaukee, Wisconsin Page 35

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