Milwaukee - Judsonjudsonrealestate.com/system/ckeditor_assets/attachments/447/milw… · Xceligent Milwaukee Team 15 The Milwaukee tracked set consists of an inventory of buildings

2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved

INDUSTRIAL MARKET REPORT

Milwaukee

4th Quarter 2016


2

Table of Contents/Methodology of Tracked Set 2

Industrial Market Map 3-4

Milwaukee Industrial Overview 5-6

Statistics by Market 7-8

Vacancy Rates & Asking Rents 9-10

Leasing & Sales Activity 11-12

New Construction 13

Industrial Advisory Board Members 14

Xceligent Milwaukee Team 15

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.

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

Inventory The total square feet (sf) of all existing single and multi tenant industrial properties greater than 10,000

sf.

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. Whether the tenant is

paying rent or not, the space is considered vacant only if it is unoccupied.

Net Absorption The net change in physically occupied space from quarter to quarter, expressed in square feet.

Weighted Average

Asking Rents

The weighted average of all asking rents expressed as a NNN rental rate and weighted on total available

square feet.


3

Industrial Market Map


4

Industrial Market Map

Milwaukee

Waukesha


5

Overview

Milwaukee Industrial Overview

The vacancy rate for the Milwaukee industrial market for 4Q 2016 remained stable at 4.2%, the same figure posted at the start of this year. Given the perceived level of tenant activity in the market, the lack of change in the vacancy rate could signal a shortage of available space in the market.

The overall net absorption for this quarter came in at 127,040 square feet (sf), bringing the total year-to-date net absorption to 4.077 million sf. Over half of the space absorbed this year took place during 1Q 2016, which includes the completion of Uline's 1.1 million sf warehouse in Pleasant Prairie.

The largest net gain for 4Q 2016 came from the completion of Zilber Industrial II, a 179,820 sf industrial building in Menomonee Falls. It was fully leased at the time of completion to a confidential tenant.

At the close of 2016, there is 3,068,800 sf of industrial space under construction in Southeastern Wisconsin, of which 880,000 sf is being built for Uline. The next largest project under construction is First Park 94 - Building B, a 602,348 sf speculative building in Somers.

# of Bldgs Inventory (sf) Total

Available (sf) Total Vacant (sf)

Total Vacancy Rate (%)

Total Quarterly Net Absorption (sf)

YTD Total Net Absorption (sf)

Flex/R&D 1,027 45,492,646 3,301,806 2,102,368 4.6% -31,595 585,954

Warehouse - Distribution

698 72,585,157 6,942,612 4,708,444 6.5% -3,337 1,729,960

Light Industrial 2,648 159,036,418 8,434,417 4,704,102 3.0% 161,972 1,761,123

Overall 4,373 277,114,221 18,678,835 11,514,914 4.2% 127,040 4,077,037

# of Bldgs Inventory (sf) Direct

Available (sf) Direct Vacant (sf)

Direct Vacancy Rate (%)

Direct Quarterly Net Absorption (sf)

YTD Direct Net Absorption (sf)

Flex/R&D 1,027 45,492,646 3,171,190 2,008,889 4.4% -51,595 668,933


698 72,585,157 6,851,612 4,708,444 6.5% -3,337 1,729,960

Light Industrial 2,648 159,036,418 8,283,976 4,681,227 2.9% 130,478 1,863,608

Overall 4,373 277,114,221 18,306,778 11,398,560 4.1% 75,546 4,262,501

# of Bldgs Inventory (sf) Available

Sublease (sf) Sublease Vacant (sf)

Sublease Vacancy Rate (%)

Sublease Quarterly Absorption (sf)

YTD Sublease Net Absorption (sf)

Flex/R&D 1,027 45,492,646 130,616 93,479 0.2% 20,000 -82,979


698 72,585,157 91,000 - 0.0% - -

Light Industrial 2,648 159,036,418 150,441 22,875 0.0% 31,494 -102,485

Overall 4,373 277,114,221 372,057 116,354 0.0% 51,494 -185,464


6

Milwaukee Industrial Overview

3.0%

3.5%

4.0%

4.5%

5.0%

(500,000)

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016

Historical Vacancy Rate & Net Absorption

Absorption Vacancy

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016

Historical Vacancy Rates by Use

Flex/R&D Warehouse - Distribution Light Industrial

(200,000)

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016

Historical Net Absorption by Use



7

Statistics by Market

# of Bldgs Inventory (sf) Total Vacant (sf) Sublease Vacant

(sf) Vacancy Rate (%)

Total Quarterly Absorption (sf)


Milwaukee 1,448 95,021,022 5,023,586 - 5.3% -173,779 570,389

Downtown 179 12,319,608 786,705 - 6.4% 31,000 192,096

Flex/R&D 8 304,465 9,926 - 3.3% - -

Warehouse - Distribution 40 2,873,448 235,900 - 8.2% 36,300 -11,900

Light Industrial 131 9,141,695 540,879 - 5.9% -5,300 203,996

North Central 144 9,702,809 1,296,846 - 13.4% -58,424 179,580

Flex/R&D 16 758,043 62,638 - 8.3% - 7,549

Warehouse - Distribution 28 2,845,700 736,847 - 25.9% -102,093 -111,881

Light Industrial 100 6,099,066 497,361 - 8.2% 43,669 283,912

North Shore 108 8,066,859 279,518 - 3.5% -85,174 29,976

Flex/R&D 18 1,011,216 - - 0.0% - 10,000


Light Industrial 63 4,477,967 10,044 - 0.2% - 105,150

Northwest 333 18,418,780 688,590 - 3.7% -125,176 112,225

Flex/R&D 71 3,033,787 182,996 - 6.0% 7,000 42,941

Warehouse - Distribution 76 6,309,997 208,958 - 3.3% 7,804 163,731

Light Industrial 186 9,074,996 296,636 - 3.3% -139,980 -94,447

South 465 30,048,900 1,033,239 - 3.4% 35,795 97,301

Flex/R&D 109 5,175,140 255,009 - 4.9% 4,708 38,419


Light Industrial 240 14,496,370 674,430 - 4.7% -10,913 -590

South Central 158 10,474,682 910,188 - 8.7% 7,000 -95,666

Flex/R&D 17 987,460 46,000 - 4.7% -500 5,694

Warehouse - Distribution 44 2,848,519 666,686 - 23.4% - -102,000

Light Industrial 97 6,638,703 197,502 - 3.0% 7,500 640

West 61 5,989,384 28,500 - 0.5% 21,200 54,877

Flex/R&D 14 848,512 4,486 - 0.5% - -

Warehouse - Distribution 8 1,037,184 - - 0.0% - -


Waukesha 1,508 71,853,954 1,941,270 44,875 2.7% 144,349 1,520,913

Northeast 497 21,568,719 458,549 11,500 2.1% 168,300 569,627

Flex/R&D 204 8,431,887 265,751 11,500 3.2% -14,580 33,707

Warehouse - Distribution 52 3,934,884 97,820 - 2.5% -24,620 306,662


Northwest 331 18,693,428 435,011 - 2.3% 106,890 487,383

Flex/R&D 81 2,381,361 53,284 - 2.2% 8,188 57,700



Southeast 317 15,377,694 229,868 10,500 1.5% -110,941 132,277

Flex/R&D 55 2,273,459 142,370 10,500 6.3% -40,423 -3,464

Warehouse - Distribution 37 3,312,070 - - 0.0% - -

Light Industrial 225 9,792,165 87,498 - 0.9% -70,518 135,741

Southwest 363 16,214,113 817,842 22,875 5.0% -19,900 331,626

Flex/R&D 125 3,788,539 42,800 - 1.1% -5,025 218,406


Light Industrial 191 9,030,530 333,909 22,875 3.7% -20,875 96,970


8

Statistics by Market

# of Bldgs Inventory (sf) Total Vacant (sf) Sublease Vacant

(sf) Vacancy Rate (%)

Total Quarterly Absorption (sf)


Washington 329 19,733,960 758,321 - 3.8% 28,553 238,856

Washington 329 19,733,960 758,321 - 3.8% 28,553 238,856

Flex/R&D 157 6,759,494 255,609 - 3.8% 22,952 181,402

Warehouse - Distribution 43 3,669,308 461,632 - 12.6% - 56,853

Light Industrial 129 9,305,158 41,080 - 0.4% 5,601 601

Walworth 168 8,896,663 395,986 - 4.5% -52,600 -181,686

Walworth 168 8,896,663 395,986 - 4.5% -52,600 -181,686

Flex/R&D 16 857,633 - - 0.0% - -


Light Industrial 138 6,522,350 184,286 - 2.8% 3,100 -137,986

Racine 385 28,938,001 1,373,675 - 4.7% 232,896 215,331

Racine 385 28,938,001 1,373,675 - 4.7% 232,896 215,331

Flex/R&D 24 1,463,635 134,029 - 9.2% - 58,971



Kenosha 213 26,027,205 668,765 45,479 2.6% 2,700 1,791,583

Kenosha 213 26,027,205 668,765 45,479 2.6% 2,700 1,791,583

Flex/R&D 29 2,195,824 52,686 45,479 2.4% 2,700 -16,456

Warehouse - Distribution 42 12,386,343 397,768 - 3.2% - 1,216,800

Light Industrial 142 11,445,038 218,311 - 1.9% - 591,239

Ozaukee 179 11,896,179 941,047 26,000 7.9% -11,615 -80,407

Ozaukee 179 11,896,179 941,047 26,000 7.9% -11,615 -80,407

Flex/R&D 53 2,565,992 530,984 26,000 20.7% -11,615 -48,915

Warehouse - Distribution 14 1,268,762 - - 0.0% - 5,000

Light Industrial 112 8,061,425 410,063 - 5.1% - -36,492

Sheboygan 143 14,747,237 412,264 - 2.8% -43,464 2,058

Sheboygan 143 14,747,237 412,264 - 2.8% -43,464 2,058

Flex/R&D 30 2,656,199 63,800 - 2.4% -5,000 -

Warehouse - Distribution 17 2,478,006 - - 0.0% - 40,522

Light Industrial 96 9,613,032 348,464 - 3.6% -38,464 -38,464

Overall 4,373 277,114,221 11,514,914 116,354 4.2% 127,040 4,077,037


9

Vacancy Rates & Asking Rents

Vacancy Rate % Weighted Average Asking Rent (NNN)

4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016

Kenosha 2.6% 2.7% 4.9% 2.6% 2.6% $4.22 $4.25 $4.25 $4.34 $4.34

Flex/R&D 1.6% 3.0% 2.5% 2.5% 2.4% - - - $6.00 $6.00

Warehouse - Distribution 3.5% 3.2% 3.2% 3.2% 3.2% $3.50 - - - -

Light Industrial 1.9% 2.1% 7.2% 1.9% 1.9% $4.25 $4.25 $4.25 $4.25 $4.25

Milwaukee 5.6% 5.5% 5.2% 5.0% 5.3% $3.83 $3.75 $3.74 $3.79 $3.93

Flex/R&D 5.1% 4.9% 4.6% 4.8% 4.6% $4.98 $4.70 $4.70 $4.80 $4.93

Warehouse - Distribution 7.3% 7.3% 7.2% 7.2% 7.7% $3.55 $3.52 $3.52 $3.62 $3.53


Ozaukee 7.2% 7.4% 7.6% 7.8% 7.9% $3.99 $4.06 $4.10 $3.92 $3.17

Flex/R&D 18.8% 19.0% 20.0% 20.2% 20.7% $3.98 $4.00 $3.95 $3.68 $2.80

Warehouse - Distribution 0.4% - - - - $2.50 - - - -


Racine 3.2% 4.3% 3.9% 5.2% 4.7% $4.03 $4.38 $4.41 $4.59 $4.31

Flex/R&D 9.4% 9.0% 9.0% 9.2% 9.2% $6.67 $6.67 $6.45 $6.41 $5.30



Sheboygan 2.8% 2.5% 2.5% 2.5% 2.8% $3.80 $3.64 $4.50 $4.50 $5.95

Flex/R&D 2.4% 2.2% 2.2% 2.2% 2.4% $5.50 $4.50 $4.50 $4.50 $5.95

Warehouse - Distribution 1.6% - - - - - - - - -

Light Industrial 3.2% 3.2% 3.2% 3.2% 3.6% $3.50 $3.50 - - -

Walworth 2.4% 3.3% 3.5% 3.9% 4.5% $3.77 $3.85 $3.88 $3.61 $3.66

Flex/R&D - - - - - - - - - -



Washington 3.9% 3.9% 4.3% 3.9% 3.8% $5.60 $5.67 $5.41 $5.83 $5.84

Flex/R&D 3.9% 4.0% 4.0% 3.9% 3.8% $5.55 $5.65 $5.12 $5.77 $5.70



Waukesha 3.1% 2.9% 2.5% 2.7% 2.7% $4.74 $4.97 $5.07 $5.23 $5.25

Flex/R&D 3.0% 3.2% 3.0% 2.7% 3.0% $5.49 $5.60 $5.62 $5.61 $5.72



Overall 4.1% 4.2% 4.2% 4.1% 4.2% $4.17 $4.22 $4.23 $4.29 $4.30


10

Vacancy Rates & Asking Rents

2.6%

5.3%

7.9%

4.7%

2.8%

4.5%3.8%

2.7%

Kenosha Milwaukee Ozaukee Racine Sheboygan Walworth Washington Waukesha

Vacancy Rate by Market

$2.25 $1.50

$2.50

$11.50

$10.00 $11.00

$4.92 $3.96 $4.31

$-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00


Asking Rent Range by Type (NNN)

$4.34 $3.93

$3.17

$4.31

$5.95

$3.66

$5.84

$5.25

Kenosha Milwaukee Ozaukee Racine Sheboygan Walworth Washington Waukesha

Weighted Average Asking Rents by Market (NNN)


11

Leasing & Sales Activity


12

Leasing & Sales Activity

Largest Absorption Changes

Property Name Occupied or Vacated (sf) Tenant Name Specific Use Market

Zilber Industrial II 179,820 Confidential Tenant (new construction)

Light Industrial Waukesha

7515 N 81st St 114,844 Buske Lines Warehouse - Distribution Milwaukee

1860S Renaissance Blvd 99,100 Leman USA Expansion Light Industrial Racine

Enterprise Business Park Bldg II

83,146 Andis Co. Warehouse - Distribution Racine

7624 S 10th St 50,240 AIM Distribution Light Industrial Milwaukee

1849 Hobbs Dr -55,700 Stock Building Supply Warehouse - Distribution Walworth

6525 W Burnham St -61,153 Bentley Packaging Light Industrial Milwaukee

1700 W Cornell St -77,940 Dabo Properties, LLC Warehouse - Distribution Milwaukee

6600 N Industrial Rd -110,400 Buske Logistics Warehouse - Distribution Milwaukee

7701 W Calumet Rd -138,480 Sam's Club Light Industrial Milwaukee

Top Transactions

Property Name Sale Price Sold (sf) Buyer Seller Market Specific Use

8100 60th St $56,359,134 731,186 Associated Wholesale Grocers Inc

Affiliated Foods Midwest Cooperative Inc.

Kenosha Warehouse - Distribution

Liberty Point $9,000,000 123,332 Bear Realty LSOP WI LLS Milwaukee Flex/R&D

500 W North Shore Dr $7,400,000 131,172 Stag Industrial Inc. VEREIT Inc. Waukesha Warehouse - Distribution

9625 55th St $6,000,000 174,350 Stag Industrial Inc. VEREIT Inc. Kenosha Light Industrial

8901 102nd St $5,280,000 105,637 The Opus Group ML Realty Partners Kenosha Warehouse - Distribution

2220-2240 S 162nd St $3,000,000 76,494 Central Asset Management Gleischman Sumner Company Inc. Waukesha Light Industrial

420 S 1st St $1,825,000 42,300 Gabaldon Properties Richard Chudnow Milwaukee Warehouse - Distribution

5070 W State St $1,710,000 71,959 Robert S Cowen Vilma Enriquez Milwaukee Light Industrial

4160 S 13th St $1,630,000 54,358 Midwest Stairs & Iron Inc. The Fall River Group Inc. Milwaukee Light Industrial

1235 Dakota Dr $1,475,000 41,715 Alan Luther Robert J Bach Ozaukee Flex/R&D


13

New Construction

2,107,208

215,690 258,902

94,000

393,000

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Kenosha Milwaukee Racine Washington Waukesha

Current Construction by Market


14

Industrial Advisory Board Members

Milwaukee Industrial Research

The Barry Company Kevin Barry

The Boerke Company

Katie Gremban

The Boerke Company Nick Unger Gard Pecor

CBRE

Trent Poole

CBRE

Christian Hunter

Scott Furmanski Ryan Rasmussen

Colliers Jim Larkin Colliers Margaret Bruckner

The Dickman Company

Nick Keys JLL Kyle Koeller

Zach Hansen NAI MLG Commercial Nathan Winkel

JLL Tony Haning

NAI MLG Commercial Adam Matson

Paradigm RE Brian Parrish

Phoenix Investors Patrick Dedering

RFP Commercial Paul McBride


15

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]

James Bertolli Sales Executive (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]

Xceligent Milwaukee Team

mailto:[email protected]




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Milwaukee - Judsonjudsonrealestate.com/system/ckeditor_assets/attachments/447/milw… · Xceligent Milwaukee Team 15 The Milwaukee tracked set consists of an inventory of buildings