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MILWAUKEE OFFICE MARKET OVERVIEWJim CavanaughDecember 2, 2013
2
METRO MILWAUKEE OFFICE MARKETVacancy Rate
2010
2011
2012
2013
10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
16.0%
17.0%
18.0%
19.0%
20.0%
Four-Year Period
Class A Vacancy RateClass B Vacancy Rate
Vac
ancy
Rat
e
Q4
12
Q1
Q2
Q3
10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
16.0%
17.0%
18.0%
2013
Vac
ancy
Rat
e
Q3 2013 Class A StatisticsVacancy Rate 12.4%YTD Absorption 39,815
Q3 2013 Class B StatisticsVacancy Rate 16.8%YTD Absorption 45,505
3
Class A Asking Lease Rates (Gross)
Period RateQ3 2013 $20.75
METRO MILWAUKEE OFFICE MARKETAverage Asking Lease Rate (Gross)
2013
2012
2011
2010
$14
$15
$16
$17
$18
$19
$20
$21
$22
Four-Year Period Class A Avg. Asking Lse. Rate (G)Class B Avg. Asking Lse. Rate (G)
Avg
. Ask
ing
Lse.
Rat
e (G
)
Q4
12
Q1
Q2
Q3
$14
$15
$16
$17
$18
$19
$20
$21
$222013
Avg
. Ask
ing
Lse.
Rat
e (G
)
Class B Asking Lease Rates (Gross)
Period RateQ3 2013 $16.87
4
Q3 2013 Class B StatisticsVacancy Rate 16.0%YTD Absorption 17,121
DOWNTOWN EASTSubmarket Statistics
2010
2011
2012
2013
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Four-Year Period
Vac
ancy
Rat
e
Recent Lease Transactions US Bank
• 615 E Michigan St• 110,636 SF• Renewal
Michael Best & Friedrich• 100 E Wisconsin Ave• 89,725 SF• RenewalQ
4 12
Q1
Q2
Q3
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%2013
Class A Vacancy RateClass B Vacancy Rate
Vac
ancy
Rat
e
Q3 2013 Class A StatisticsVacancy Rate 9.2%YTD Absorption 23,812
5
Q3 2013 Class A StatisticsVacancy Rate 17.8%YTD Absorption (10,253)
DOWNTOWN WESTSubmarket Statistics
2010
2011
2012
2013
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
Four-Year Period
Vac
ancy
Rat
e
Recent Lease Transactions UMB
• Schlitz Park• 88,000 SF• Relocation
CapTel, Inc.• 310 W Wisconsin Ave• 37,864 SF• RenewalQ
4 12
Q1
Q2
Q3
14.0%
15.0%
16.0%
17.0%
18.0%
19.0%
20.0%
21.0%
22.0%
23.0%
24.0%
2013Class A Vacancy RateClass B Vacancy Rate
Vac
ancy
Rat
e
Q3 2013 Class B StatisticsVacancy Rate 19.5%YTD Absorption 61,597
7
Q3 2013 Class B StatisticsVacancy Rate 19.4%YTD Absorption 50,930
MILWAUKEE NORTH SHORESubmarket Statistics
2010
2011
2012
2013
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
Four-Year Period
Vac
ancy
Rat
e
Recent Lease Transactions Mortgagebot
• 12080 N Corporate Pkwy• 36,096 SF• Relocation
Vestica Healthcare, LLC• 1000 W Donges Bay Rd• 20,000 SF• Relocation / Expansion
Q4
12
Q1
Q2
Q3
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
2013 Class A Vacancy RateClass B Vacancy Rate
Vac
ancy
Rat
e
Q3 2013 Class A StatisticsVacancy Rate 9.4%YTD Absorption 50,316
8
Q3 2013 Class B StatisticsVacancy Rate 22.8%YTD Absorption (410)
MILWAUKEE NORTHWESTSubmarket Statistics
2010
2011
2012
2013
10.0%
14.0%
18.0%
22.0%
26.0%
30.0%
34.0%
38.0%
42.0%
Four-Year Period
Vac
ancy
Rat
e
Recent Lease Transactions HNTB Corporation
• 11414 W Park Place• 26,451 SF• Renewal
Kohl’s ???
Q4
12
Q1
Q2
Q3
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
2013 Class A Vacancy RateClass B Vacancy Rate
Vac
ancy
Rat
e
Q3 2013 Class A StatisticsVacancy Rate 16.5%YTD Absorption (3,502)
9
WEST ALLISSubmarket Statistics
2010
2011
2012
2013
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
Four-Year Period
Vac
ancy
Rat
e
Recent Lease Transactions Columbia St. Mary’s
• 801 S 70th St• 33,670 SF• Renewal
Rogers Memorial Hospital• 2448 S 102nd St• 12,000 SF• New Location
Q4
12
Q1
Q2
Q3
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%2013 Class B Vacancy Rate
Vac
ancy
Rat
e
Q3 2013 Class B StatisticsVacancy Rate 18.3%YTD Absorption (133,596)
10
Q3 2013 Class B StatisticsVacancy Rate 20.0%YTD Absorption 13,239
MAYFAIR / WAUWATOSASubmarket Statistics
2010
2011
2012
2013
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
Four-Year Period
Vac
ancy
Rat
e
Recent Lease Transactions Zywave
• 10700 Research Dr• 24,155 SF• Expansion
Vitas Healthcare Corporation of Illinois• 2675 N Mayfair Rd• 11,203 SF• RenewalQ
4 12
Q1
Q2
Q3
0%
4.0%
8.0%
12.0%
16.0%
20.0%
24.0%2013
Class A Vacancy RateClass B Vacancy Rate
Vac
ancy
Rat
e
Q3 2013 Class A StatisticsVacancy Rate 11.3%YTD Absorption (58,639)
11
Q3 2013 Class B StatisticsVacancy Rate 16.4%YTD Absorption (9,874)
BROOKFIELDSubmarket Statistics
2010
2011
2012
2013
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
Four-Year Period
Vac
ancy
Rat
e
Recent Lease Transactions Milliman
• 15800 W Bluemound Rd• 78,024 SF• Renewal / Expansion
Fiserv, Inc.• 275 N Corporate Dr• 33,575 SF• RenewalQ
4 12
Q1
Q2
Q3
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%2013 Class A Vacancy Rate
Class B Vacancy Rate
Vac
ancy
Rat
e
Q3 2013 Class A StatisticsVacancy Rate 17.7%YTD Absorption 6,704
12
Q3 2013 Class B StatisticsVacancy Rate 12.1%YTD Absorption 9,723
WAUKESHA / PEWAUKEESubmarket Statistics
2010
2011
2012
2013
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Four-Year Period
Vac
ancy
Rat
e
Recent Lease Transactions Humana
• N19 W24133 Riverwood Dr• 40,700 SF• Renewal
Medco Health Solutions• N19 W23130 Riverwood Dr• 29,704 SF• RenewalQ
4 12
Q1
Q2
Q3
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
2013 Class A Vacancy RateClass B Vacancy Rate
Vac
ancy
Rat
e
Q3 2013 Class A StatisticsVacancy Rate 9.8%YTD Absorption 26,676
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2013 OVERVIEWWhat Works
Office Trends
• Open office concept
• Glass and natural light
• Common meeting rooms
• Larger conference rooms
• Coffee bar and lunch rooms
• Flex schedules
• Shared work spaces
14
2013 OVERVIEWWhat Works
Common Elements to Successful Projects
• Involved Ownership
• Amenities• Fitness Centers
• WI-FI
• Food
• LEED
• Valet/Concierge Services
• Corporate Events
• Collaboration
• Focus on Improvements more than Rental Rate
T +1 414 274 1629F +1 414 273 [email protected]
For more information regarding this presentation please contact:JIM CAVANAUGH