MILWAUKEE, July 24, 2020– The Commercial Association of REALTORS® Wisconsin (CARW) second quarter numbers show a market and economic overview of the industrial and office industries and notable transaction report in retail. The market reports are produced in collaboration with CARW members and REDIComps Research and Catylist. The high level numbers are HERE.
"We're starting to see the effects of COVID-19 shutdowns in the statewide data," said Tracy Johnson, President and CEO for CARW, "but the true impacts will become even more visible as workers return to the workplace and real estate considerations are evaluated. "Much of the inventory from new construction that was on the table for 2020 will be absorbed in Q3 and Q4."
"The second quarter office data reveals that absorption was significantly impacted, but vacancy rates, year over year, were not as severely impacted by the pause for COVID-19," Jim Cavanaugh, Principal at Cushman & Wakefield | BOERKE said. "The office market went into the second quarter with a enough momentum to finish with overall positive statistics. Most deals long in the works were completed as planned with downtown remaining the leader in second quarter absorption."
"Many tenants shifted their strategies from long-term expansions to short-term renewals while they wait to see what lasting impact employment and workplace trends have on their respective industries," said Ben Anderson, Colliers International. "Conversely, there has been an uptick in owner occupied activity with firms looking to take advantage of potential pricing discounts on purchase transactions."
Industrial vacancy remains low around 4.2%. Much of the activity in Q2 was driven by e-commerce giant, Amazon, resulting in 1,186,000 sq ft absorption. "The industrial segment remained strong throughout Q2 with many large new deliveries and ground breakings on new facilities," said Adam Williquette, President for American Companies. "Vacancy remains low throughout southeastern Wisconsin with demand still high and little existing product to place users. I expect more new development and activity to remain strong going into Q3."
Second quarter retail sale and lease transactions suggest that there will be increased activity through 2020 as retailers make decisions to evolve with changing consumer needs and demands. "Retail is still fighting the good fight and retailers are doing everything they can to survive however with the highly uncertain consumer environment and large degree of disruption caused by the pandemic and social unrest we do not currently have a high level of certainty what the future will hold," said Cory Sovine, Colliers International Wisconsin. "Many mom and pop retailers are struggling to survive and are finding that opening their doors for take out and limited service options are not keeping them solvent. Meanwhile, many national retailers that were already on their way out have been completely exposed with this disruption acting as an accelerant and many other national brands are using the disruption as cover to cut loose underperforming stores that likely would have eventually been closed anyhow."
------------------------------
Benjamin Boardmember
Global VP of Strategy
State Farm
Chicago IL
------------------------------