After months of trying settle workplace policies after COVID-19, many companies are looking for new space. This is according to Cushman & Wakefield’s Quarterly Milwaukee Office Report. The city is home to six Fortune 500 companies. Its growing water technology and energy industries make it a regional innovation hub.
This, along with the increasing need for employees, drove many businesses to relocate to the CBD. Q42022 saw positive absorption, led by Silvercrest Asset Management leasing 11,971 sq.ft at BMO Tower (790 North Water St.) and U.S. Bureau of Land Management renting 8,797 sq.ft at 250 E. Wisconsin Ave.
Non-CBD markets saw negative absorption, but non-CBD Class A absorption was up at 9,680 square footage in Q4, mainly due to National Insurance Services leasing more than 15,000 square feet in Brookfield. Overall, market leasing activity was strong with 417.946 square feet leased in 111 leases.
The Historic Third Ward has seen an increase in activity from growing businesses that require more space, such as Atlas MKE and Attoles Law SC.
Based on the report, the overall market asking rate for square footage is $21.82 per sq. foot, which is a 2.1% increase in QOQ. The Class A rate is $24.97/square foot, which is 5.1% more QOQ. The overall market leasing rates remained stable at $21-$22 per sq. foot through 2022, as quality slowed down. However, this year could see an increase in inflation due to rising NNN expenses.
Cushman & Wakefield stated that if there is not continued mass movement and more leases signed, the negative and positive absorption could continue into 2023. Access to the workforce will continue determining movement in the market. There has been interest from suburban firms looking for a relocation or opening a new branch in the CBD.