The downtown east submarket had 34,795 square feet of positive net absorption during the quarter. That submarket's vacancy rate is now at 14.1 percent and its class A vacancy rate is at 7.8 percent according to Xceligent. CBRE's first quarter Milwaukee office market report says the downtown east submarket's vacancy rate is even lower, 13.1 percent.
"The downtown office market is thriving as the macroeconomic recovery continues to gain traction," the CBRE report says.
Baker Tilly will move from the Honey Creek Corporate center on the west side of Milwaukee to the U.S. Bank Center in the fourth quarter of this year.
The downtown west submarket had 37,091 square feet of positive net absorption during the quarter. However, the submarket's vacancy rate is still high, 31 percent according to Xceligent.
Almost all of the downtown west absorption could be attributed to Schlitz Park, which obtained two major leases during the first quarter: AECOM leased 19,374 square feet of space in the RiverCenter building and Streetlinks Lender Solutions leased 17,419 square feet in the Bottlehouse A building. AECOM is consolidating offices downtown and on the far northwest side into the Schlitz Park space. Streetlinks, an appraisal management software and services company, will move its office from Wauwatosa to the Schlitz Park space.
"The lack of space in the downtown east (submarket) combined with a lack of progress in construction of a new office building bodes well for the health of (the) downtown west (submarket) as it is positioned nicely to absorb tenants that may look to downtown with a value-minded approach," the CBRE report said.
The Third Ward/Walker's Point submarket had positive net absorption of 17,109 square feet in the quarter and its vacancy rate is now at 21.2 percent. Johnson Controls leased 9,000 square feet of office space at 301-15 N. Broadway during the first quarter.
But while the downtown office market had a strong first quarter, the office market for the region as a whole did not. The metro Milwaukee office market had negative absorption of 29,411 square feet in the first quarter, according to Xceligent. The region's office space vacancy rate is now at 20.9 percent according to Xceligent.