In its 2009 forecast for the metro Milwaukee commercial real estate market, Brookfield-based NAI MLG Commercial says "continued positive absorption" is expected this year for the area's industrial space.
"Industrial activity in Milwaukee remains stable after a volatile economic year," the report states. "The 2008 industrial market experienced an increase in leasing compared to 2007. However, there were virtually no new 'spec' buildings built in 2008, which is why continued positive absorption is anticipated in 2009. Indications are that there are a number of companies waiting on the sidelines to pull the trigger on buying or leasing additional space. Due to the conservative nature of southeastern Wisconsin, there are a number of companies that are able to withstand and prosper during this economic downturn, which leads to an optimistic outlook for real estate in 2009."
However, the picture is not so bright for the area's office market, the NAI MLG report says. In 2008 net absorption was negative for every submarket in the area, except for downtown Milwaukee west, "and the expectation is that this situation will get worse," the report says.
The area's retail real estate market has slowed but, "remains relatively strong due to historically conservative practices," the NAI MLG report says. After years of inflation, retail land prices are coming down as developers are forced to charge lower rents as a result of the economic downturn. However, retail leasing activity in the Milwaukee area remains steady, the report says. "The retail market will experience a decline in 2009 in terms of lease rates," the report says. "However, absorption and vacancy rates should remain stable."
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