southeast Wisconsin Market Summary:
Commercial Real Estate has been an increasingly turbulent market as pricing adjusts to the increase in interest rates in 2022/2023. The Industrial market has performed well, however early 2024 had experienced a slow down which was largely expected. The sharp rise in interest rates and elevated construction costs has nearly wiped out speculative construction. That supply shortage is now hitting the market as projects that take about 18-24 months are now complete and there is effectively zero new supply in the pipeline (speculative). The first Quarter of 2024 did experience a slowdown partly due to decreased overall demand and a bubble of new buildings being delivered. The Q2 numbers appear to show the expected rebound as new construction that went online in the first quarter is largely absorbed, vacancy declined, and lease rates continue to increase.
Walworth County Market
The Walworth County market has remained extremely tight. Speculative construction has not occurred in this market which is keeping supply low. Look for developers to promote Build to Suit projects and companies to take on new construction for their specific purposes. East Troy and Southern Mukwonago have Industrial land available and should be expected to see new projects in the near term. Significant transactions for the quarter include:
555 E Koopman Ln, Elkhorn 110,900 Sq Ft Sold
265 O’Connor Dr, Elkhorn 71,040 Sq Ft For Sale
402 Main St, Walworth 87,398 Sq Ft Proceeding to Closing