Monday, March 17, 2025
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Midwest Market Reports

IndustrialMarket ReportsMidwestMidwest Market ReportsWisconsin

South Central Wisconsin’s Economic Engine Continues to Set the Pace

by Kristin Harlow

By William Mears, Coldwell Banker Commercial McGuire Mears & Associates What a difference a decade makes. While some may characterize the evolution of the development and investment climate of the Janesville-Beloit, Wisconsin metropolitan statistical area (MSA) with a population of 160,120 as an extreme makeover, others will note the area has been South Central Wisconsin’s best kept secret. Case in point: the numbers speak for themselves, and local real estate and economic development officials are bullish on this location’s growth trajectory. For starters, the area’s logistical friendly environment, its value-add real estate and workforce assets and its seasoned development team provide the right ingredients to facilitate development opportunities. Since 2010, the Janesville-Beloit MSA has added more than 12 million square feet of commercial and industrial space. Recognized brands such as Amazon, Kerry Foods, Fairbanks Morse Defense, SHINE Medical Technologies and Prent Corp. represent a sampling of the area’s business community. These companies and their 3,500+ counterparts drive the area’s annual GDP figure, which is nearly $7 billion. Industrial and warehousing demands from end-users seeking to leverage critical supply chain inputs are continually impacting the county’s real estate market. As a result, industrial vacancy rates are hovering around 2 percent, and …

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Market ReportsMidwestMidwest Market ReportsOfficeWisconsin

Industrial Companies Drive Boom in Milwaukee Office Growth

by Kristin Harlow

By Andrew Jensen Jr., Cushman & Wakefield | Boerke Milwaukee was once known as a city of industries and beer, the hometown of Allen-Bradley (now Rockwell Automation), Briggs & Stratton, Harley-Davidson, Johnson Controls, Master Lock, Rexnord and, of course, the Miller, Pabst and Schlitz brewing juggernauts. Today, Milwaukee’s economy is more diversified, and its industrial companies are quieter and not as flashy. But the area’s industrial firms are still central to its success and are now driving the area’s office market. In and near Milwaukee’s central business district (CBD), major recent office deals, all involving industrial users, include: ● Milwaukee Tool, based in the suburb of Brookfield, will soon expand into Milwaukee with a $30 million redevelopment of a vacant five-story, 333,000-square-foot office building. Milwaukee Tool will employ up to 2,000 people there, the largest-ever influx of jobs to the CBD by a suburban-based firm. The City of Milwaukee is providing up to $20 million in financing for the project. ● Utilities and infrastructure contractor Michels Corp., based in the small Wisconsin town of Brownsville, chose a riverfront development site 60 miles away in Milwaukee for an office expansion after considering Chicago and New York City. The $100 million project, …

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IndustrialMarket ReportsMidwestMidwest Market ReportsNebraskaOfficeRetail

Solid Fundamentals Uphold Lincoln Real Estate Market

by Kristin Harlow

By Tom Graf, NAI FMA Realty Over the past decade, Lincoln has experienced sustained growth and earned a reputation as a place to be in the Midwest. Its low unemployment, stable economy, low cost of living, prospering tech scene as well as lifestyle and entertainment fitting of a big city with the feel of a small community has insulated Lincoln better than many cities of its size. Perhaps this is most compelling with the number of cranes spotted in the skies back in 2008 and again in 2020. Just as many cities were struggling, Lincoln built its way out of the Great Recession in 2008 and 2020 was no exception. Retail Throughout the economic uncertainty brought on by the COVID-19 pandemic, Lincoln’s retail landscape fared well with vacancy holding at 7.1 percent for the year in 2020. New construction was active throughout the market despite store closures and bankruptcies making the national headlines. For some opportunistic retailers, vacant spaces opened the door to take advantage of the market and negotiate better terms for new locations. Retailers thriving in today’s market are the “daily needs” retailers — grocery, home improvement and discount concepts. Some niche online businesses, which have grown through …

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IndustrialMarket ReportsMidwestMidwest Market ReportsNebraska

Omaha Industrial Activity Remains Strong, Particularly in Western Sarpy County

by Kristin Harlow

By John Dickerson, OMNE Partners Our Omaha-area industrial sector has come through the pandemic very well, compared with other commercial sectors. We have not had to work out many rent payment plans with tenants, and industrial users going out of business have been minimal. Omaha has survived and come out of 2020 well economically. Our unemployment rate is the second lowest in the country. Our cost of living has also been lower than most other major cities in the Midwest. This low cost of living carries over to real estate rental rates and operating costs. Leasing activity Industrial leasing has been quite good in Omaha for years. Our vacancy rates have been below 5 percent for a number of years and currently have been about 3.5 percent. By reviewing spaces for lease on Crexi, an internet marketing service, there are about 120 properties that I identified with space available with a total of over 3 million square feet for lease. Rental rates for industrial vary, of course, for typical reasons — age and condition of the property, location and how much a space/building might be finished in office or other special improvements. In Omaha, many flex buildings have users that …

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Market ReportsMidwestMidwest Market ReportsNebraskaRetail

Drive-Thrus, Pickup Services Will Shape Future of Retail Landscape

by Kristin Harlow

By Jared Sullivan, The Lerner Co. The retail commercial real estate industry has been an interesting world to observe over the last several years, to say the least. From the repurposing of massive retail boxes and malls following the fall of Gordmans, Sports Authority, Sears and others, to the unpredictable global environment we have been experiencing over the last 12 months due to COVID-19. One thing that’s certain is the ability to quickly adapt within the retail world is a critical element to remain relevant as the mold of consumers’ needs continues to evolve. Fortunately for the Omaha and Lincoln retail markets, the downturn for businesses and consumers alike has been significantly less than the more densely populated cities and suburbs of New York and California. Nevertheless, the impact of government shutdowns and restrictions throughout 2020 has handicapped more businesses and landlords than we ever expected. As we emerge from this storm, we must ask ourselves “What will the retail landscape look like moving forward?” Here to stay One outcome of 2020 we anticipate seeing as a gold standard moving forward has been the implementation of curbside carryout and mobile order pickup services. While the concept of these services is …

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Market ReportsMidwestMidwest Market ReportsMultifamilyOhio

Stable Columbus Multifamily Market Balances Urban, Suburban Growth

by Kristin Harlow

By Ryan Duling and Andy Warnock, Lument Sizing up the Columbus, Ohio multifamily market is more challenging than it may seem to the casual observer. Neither fish nor fowl, Columbus doesn’t fit comfortably within the definitions of either growth or high-yield markets. Looked at from one angle, it appears largely suburban and conventional, but from another, increasingly sophisticated and demographically youthful. The presence of large institutions in the economic landscape — banks, healthcare systems, state government, universities — lend Columbus a slightly plodding image, but the heartbeat of the local economy is a dynamic group of middle market concerns punching above their weight class in logistics, professional services, retail and the digital spectrum. Metaphorically, it’s the cousin you considered a bit dull growing up who blossomed into an adult success. C-Bus’s relatively low population density, younger demographics and the relative ease of its transition to the work-from-home environment paid hefty dividends during the pandemic. Because infection and hospitalization rates were lower than average, the local economy was able to return to near normal in February, positioning the market to take full advantage of the stimulus-fueled economic recovery that could find its stride this summer. Labor market weathers pandemic Although COVID …

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Market ReportsMidwestMidwest Market ReportsMinnesotaMultifamily

Twin Cities Multifamily: A Look Back, What’s Next for the Resilient Market

by Kristin Harlow

By Ted Bickel and Jeff Budish, Colliers MSP At the start of the pandemic last spring, conversations with developers, investors and operators varied from discouraging to catastrophic. Everyone expected the worst. Luckily for the industry, that is not what happened. Amid a year of great uncertainty across the economic spectrum, the Twin Cities multifamily market showed a great deal of resilience, overcoming many challenges in 2020. 2020 recap Considering that the marketplace was nearly frozen for the second quarter of 2020, overall transaction volume for 2020 was surprisingly strong. Minnesota saw a considerable uptick in activity toward the end of the year, driving annual totals up to just short of $1.3 billion. A strong bounce-back in the second half of the year speaks to strong demand drivers and generally solid operating performance — even during the economic shutdown. However, while vacancies did not run up, as many had feared, collections and bad debt suffered. Understandably, many tenants struggled to pay rent as stimulus waned later in the year. This had a notable effect on net operating income. Overall, pricing did not change, while cap rates lowered to some extent. Inexpensive debt, particularly from the agencies, was a large factor in …

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IndustrialMarket ReportsMidwestMidwest Market ReportsMinnesota

Twin Cities Industrial Market Poised for Additional Growth

by Kristin Harlow

By Joe Mahoney, Opus Development Co. Despite a confluence of major events in 2020 that shook our world — the pandemic, social unrest, historically high rates of unemployment — the industrial real estate market in the Twin Cities fared very well. While positive net absorption was limited in the second quarter of 2020, the rate accelerated to 1.1 million square feet during the fourth quarter and ended the year at 3.2 million square feet, according to CBRE Minneapolis-St. Paul. Active users also increased. In the beginning of 2020, there were 6.4 million square feet of users. At the end of the third quarter, that number had increased to 10 million, and by the end of the year, there were close to 12 million square feet of users, almost doubling over the course of the year. We see user demand continuing to trend up and accelerate this year. To support growth plans, users are looking for highly functional manufacturing, warehousing and distribution facilities. Many businesses are increasing efficiency and productivity by consolidating several obsolete buildings into one new highly functional, build-to-suit space. COVID-19 supply chain disruption has prompted some businesses to increase their footprint for storing more inventory and reducing reliance …

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IllinoisMarket ReportsMidwestMidwest Market ReportsOffice

Tenants, Landlords Analyze Future of Chicago’s Fulton Market District

by Kristin Harlow

By Allen Rogoway, Cresa Chicago Over the past seven years, the Fulton Market office submarket has changed the landscape, and boundaries, of Chicago’s central business district (CBD) and what a “live-work” ecosystem can look like. Whereas the River North office submarket evolved over 30 years to become a low-cost alternative to the Loop for creative, boot-strapped companies requiring mostly small footprints, Fulton Market was developed for tech-centric, multinationals willing to pay “Trophy Tower” prices to attract and retain the very best talent. Employees didn’t mind adding a Chicago Transit Authority (CTA) transfer or 20 extra minutes to commute times each way in order to be in a neighborhood that was developed by big money yet felt authentic. Much of the architecture was preserved, and new construction was held to standards whereby the new mostly blended in with the area’s former produce, cold storage and century-old warehouses that had been converted for office use. Then old-guard companies and industries from accounting, consumer products and even law, started to set up shop in buildings that provided people with a very different workplace experience than what they were used to. Ownerships thoughtfully invested in tenant amenity spaces and retail pairings that matched with …

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IllinoisMarket ReportsMidwestMidwest Market ReportsOffice

The Future of Chicago’s CBD Is Slowly Coming into Focus

by Kristin Harlow

By Jeff Mulder, Colliers International Chicago By now, we all know that the COVID-19 pandemic has wreaked havoc across the world, affecting life as we knew it in the most unexpected ways. Our business, the business of office space, has been hit hard as companies almost instantly deferred or canceled real estate decisions and switched to work-from-home. The average occupancy of buildings in Chicago’s central business district (CBD) is currently 8.2 percent, according to the Building Owners and Managers Association. One year in, and corporations are still trying to determine the best path forward and what that will look like. But evidence of change, and some signs of what the future will look like, are slowly coming into focus. One noteworthy and reliable data point is sublease space. Colliers research reports that in the 20-plus-year history of Chicago’s office market, vacant sublease space offerings rise and peak within two to four quarters following major financial crises like the 2002 Tech Wreck and the 2009 Great Financial Crisis. Following these trends, current sublease space offerings in Chicago’s CBD have more than doubled since March 2020. Typically in the past, tenants in the market quickly absorbed sublease spaces that were offered — …

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