The Milwaukee industrial market is a healthy one, offering midwestern location, pre-recession market characteristics and a high level of cooperation among commercial real estate practitioners. In Brew-town, brokers share data easily and in doing so, drive transaction counts across the whole market. Shared data means more options for making client needs fit inventories. A quick sampling of recent listings and deals includes:
What’s behind Milwaukee’s industrial market? We ask veteran broker Brian Parrish
Specialist in the sale and lease of industrial property in Milwaukee, Brian Parrish has been building expertise in the market for fifteen years. Currently President and CEO of PARADIGM Real Estate, Brian took a few minutes to share his expert perspective on what makes this market tick.
Xceligent data shows combined vacancy rates for the industrial market in Milwaukee have held at 4.2% from 1Q 2016 to 4Q2016. Does what you're seeing 'on the street' match with this finding?
Brian: Yes, we are back to pre-recession levels. The only reason it isn’t lower is that some new construction has come onto the market and is in the process of being absorbed. It is common to hear brokers and buyers lamenting about lack of inventory, so to the street it may feel like even less is available. Quite a bit of the vacancy at this point constitutes larger and older buildings that require some repurposing. Nonetheless, this is still an attractive proposition compared to the increasing costs of new construction.
Another marketplace factor is that bank financing is readily available for industrial users (buyers). Much of the vacant space tends to be in properties for lease, where a sale is not possible. As interest rates rise and users become more frustrated with inventory, the pendulum should swing towards leasing again.
Talk a little about your most recent transaction. How long was it in the pipeline?
Brian: PARADIGM recently represented General Capital in the purchase of a 135,000sf former Sam’s Club on 76th Street near Good Hope Road in Milwaukee. The deal took about 8 months from beginning to close, and involved rezoning the property from retail to industrial. The building has been leased on a long term basis to Sellars Absorbent Materials. It is a great example of how a vacant building can be repurposed from one economic driver to another, continuing to provide employment to the local community.
What do you think the big story in 2017 will be in Milwaukee industrial property?
Brian: Milwaukee — particularly Downtown — is truly experiencing a renaissance. Every day a new construction project gets announced, so it is hard to contemplate a story that would draw more buzz than the noteworthy projects we already have in town. With that said, I think we will see some more speculative development in the north and the west submarkets of southeastern Wisconsin where such has lacked over the last several years.
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