The Milwaukee area's office vacancy rate rose to 15.6 percent during the third quarter, up from 14.7 percent in the second quarter and 14.3 percent in the first quarter, according to new data from New York-based Reis Inc., which provides commercial real estate market information.

The Milwaukee area's office market had a net negative absorption of 272,000 square feet during the third quarter. The Milwaukee area's office vacancy rate is lower than the 17.1 percent Midwest average, but exceeds the 13.7 percent national average, according to Reis.  

Class A office space in the Milwaukee area is faring better with a vacancy rate of 11.5 percent, up from 11.0 percent in the second quarter.

Class B and C office space in the area is struggling with an 18.8 percent vacancy rate, up from 17.6 percent in the second quarter.

Downtown Milwaukee also has more vacant office space. The downtown area has an office space vacancy rate of 14.4 percent, up from 13.0 percent in the second quarter and 12.4 percent in the first quarter, according to Reis. The vacancy rate has been rising steadily downtown since it was at 11.5 percent in the third quarter of 2007. The downtown area office market had a negative net absorption of 172,000 square feet of space during the third quarter of this year.

Other submarket office space vacancies, according to Reis are:

• Northern suburbs, 13.2 percent (up from 12.3 percent in the second quarter)
• Western Waukesha County, 13.9 percent (down from 14.0 percent)
• Greenfield/south, 15.0 percent (up from 11.8 percent)
• Wauwatosa/West Allis, 18.2 percent (up from 18.0 percent)
• Brookfield, 18.4 percent (up from 18.1 percent)

Retail space vacancies on the rise

The economic slump has resulted in more vacant storefronts in the region. The Milwaukee area's retail space vacancy rate shot up from 8.7 percent in the second quarter to 10.4 percent in the third quarter, according to Reis. The region's retail space had a net absorption of 24,000 square feet of space during the third quarter.

Submarket retail space vacancies, according to Reis, are:

• Waukesha County, 7.9 percent (up from 7.7 percent in the second quarter)
• Northern Milwaukee/Ozaukee counties, 10.5 percent (up from 9.0 percent)
• Southern Milwaukee County, 12.8 percent (up from 9.5 percent)

Apartment vacancies fall

The Milwaukee area apartment market continues to provide a ray of sunshine for the region's real estate market. The Milwaukee area apartment vacancy rate was 3.7 percent in the third quarter, down from 4.1 percent in the second quarter and 4.0 percent in the third quarter of 2007.

Submarket apartment vacancies, according to Reis, are:

• Western Waukesha County, 1.8 percent (down from 2.6 percent in the second quarter)
• Brookfield/New Berlin, 2.5 percent (down from 2.6 percent)
• Wauwatosa/West Allis, 2.5 percent (down from 2.7 percent)
• Cudahy/South Milwaukee/Oak Creek, 3.1 percent (down from 3.6 percent)
• Greenfield/Greendale/Franklin, 3.2 percent (down from 3.5 percent)
• Eastern City of Milwaukee, 5.3 percent (up from 4.8 percent)
• Western City of Milwaukee, 5.5 percent (down from 5.8 percent)
• Northshore/Northwest Milwaukee, 5.7 percent (down from 6.4 percent)

Reis has a local data sharing partnership with BizTimes Milwaukee.

Residential foreclosures in the state and in the southeastern Wisconsin region are still ahead of last year's pace, according to the latest data from ForeclosuresWI.com.

"Wisconsin foreclosures have been building up to the current levels for three years," said Robert Jansen, president of ForeclosuresWI.com. "While new foreclosure filings appear to be leveling off, monthly filings remain over double what they were just five years ago. There is no doubt it will take time for these properties to get through the system."

The state had 2,701 foreclosures in October, up from 2,280 in October of 2007. Year to date the state has had 20,861 foreclosures, a 23 percent increase from the 17,013 foreclosures in 2007.

In October, there were 1,238 foreclosures in the eight county southeastern Wisconsin region, up 132 or 12 percent compared with October of 2007.

Year-to-date there have been 9,172 foreclosures in the region, up 1,493 or 19.4 percent compared to the first 10 months of 2007.

October foreclosure totals for each local county:

• Milwaukee, 731 (up from 689 in October of 2007)
• Racine, 129 (up from 86)
• Waukesha, 104 (up from 91)
• Kenosha, 101 (up from 96)
• Walworth, 61 (up from 45
• Washington, 51 (up from 34)
• Sheboygan, 44 (down from 46)
• Ozaukee, 17 (down from 19)

The City of Milwaukee recently issued a request for proposals (RFP) seeking developers interested in buying and developing a vacant 5.6-acre site at 2372 S. Logan Ave. in the Bay View neighborhood. The property was formerly used as a U.S. Army Reserve site.

The city's asking price for the property is about $2 million. The RFP for the property is due on Jan. 17.

City officials want to see a "net zero energy development" on the site with a mix of single family, townhouse and multi-family residential units on the site. The city wants between 75 and 150 residential units built on the property.

A "net zero energy development" must create enough energy through on-site renewable energy resources annually that is equal or greater than the amount of energy that is consumed annually.

Alderman Tony Zielinski said the future residential units at the site will most likely be powered entirely by solar energy and wind power.

"This will be a catalytic project showing that homes can be powered by solar, wind and even geo-thermal energy sources, emitting zero green house gases," Zielinski said. "We think this location is beneficial because it is likely that Bay View residents will quickly see the benefits of 100 percent renewable energy and will choose to use it to power their own homes and businesses. Instead of cutting a check to the energy company every month, owners of 100 percent renewable energy homes will actually receive a check from the energy company as it looks to invest in these important new energy sources."

Last-minute registration is available to attend the sixth annual BizTimes Commercial Real Estate & Development Conference, which will be held Friday, Nov. 14, from 7:30 a.m. to 9:30 a.m. at the Italian Community Center in downtown Milwaukee.

More than 450 people have registered to attend the conference so far. The theme of this year's conference will be "The Fresh Coast Advantage," and the program will focus on the strategic competitive advantage the Great Lakes region will have in the 21st century, when "water becomes the new oil."

This year's conference also will explore how people and companies in the Milwaukee region's commercial real estate market can survive in the economic downturn and the tightened capital markets.

The expert panel for the conference will include:

• Sean Linnane, vice president of Magellan Development Group LLC, one of downtown Chicago's most prominent real estate development companies. Linnane is overseeing the development of Chicago's $4 billion, mixed-use Lakeshore East community, believed to be the largest parcel of downtown land under development in any major U.S. city. Linnane will speak about the intrinsic value of waterfront development, and he will provide an outsider's assessment of Milwaukee's commercial real estate market and its use of its lakefront.
• Franz Hoffmann, president of Procorp Enterprises LLC in Milwaukee and chair of the Milwaukee 7 Water Council. Procorp specializes in sustainable water and wastewater treatment solutions. Hoffmann will speak how Milwaukee can use its water resources as an economic development tool in the 21st century.
• James Randel, commercial real estate attorney, broker investor and author, will discus strategies people in the real estate industry can use to survive a down market. Randel is the author of "The Real Estate Game And How To Win It" and "Confessions of a Real Estate Entrepreneur." Randel is a distinguished commentator on real estate issues at conferences throughout the nation, including the Harvard Business School, and he is frequently featured as a real estate expert on national newscasts. He will travel from Connecticut to speak at the Milwaukee conference.

The opening remarks of the conference will be provided by Richard "Rocky" Marcoux, commissioner of the Milwaukee Department of City Development. Jim Villa, the new president of the Commercial Association of Realtors Wisconsin (CARW), will provide some exclusive market data at the conference. The conference will be moderated by Mark Eppli, Ph.D., professor of finance and chair of the Robert B. Bell Real Estate Program at Marquette University.

Small Business Times presents the conference annually in partnership with Marquette's Bell Real Estate Program and CARW.

To register to attend the conference, visit www.biztimes.com/freshcoast.

Product Miniature Company Inc. recently purchased the 27,300-square-foot building at N60 W14630 Kaul Ave., Menomonee Falls, from John Petelinsek, the prior owner of Power Test Inc., for $1.35 million. Stephen Provancher and Adam Matson of NAI MLG Commercial represented Petelinsek and Tony Haska of NAI MLG Commercial represented Product Miniature in brokering the sale.

D&K Development recently sold the 14,211-square-foot office building at 15350 W. National Ave. in New Berlin for $1.175 million. RFP Commercial brokers Scott Revolinksi and Ben Adank represented D&K in brokering the deal. RFP declined to disclose the identify of the buyer of the building.

Inland Companies

RFP Commercial

RFP Commercial

• Wilde Family, LP purchased 3 acres of land at 7225 W. Main St, Milwaukee, from Fair Park Business Center for $776,900.

Wauwatosa-based Selzer-Ornst Co. recently completed the remodeling and 12,000-square-foot expansion project for Abri Health Plan in West Allis. Selzer-Ornst has also been selected to complete the build out of the Brookdale Senior Living Employee Coline in the Summit Place office center in West Allis. Selzer-Ornst is also completing the Rotary Park Performance Pavilion at Hart Park in Wauwatosa.

Title: Industrial Sales Associate

Company: NAI MLG Commercial

Education: Marquette University, graduate in 2008, double major in commercial real estate and marketing.

Family: "I'm the oldest of five siblings and originally from Kansas City, Mo."

City of Residence: Milwaukee

What are you working on? "I have several listings throughout Milwaukee and I'm currently listing a group of great buildings that fit a variety of users. I have the Heather Business Center available for sale and lease in the northwest section of Milwaukee that fits a flex user looking for a good blend of high end office and warehouse space. I also have space available as far south as the airport, as far north as Germantown, and as far west as Hartland. I've been working hard on finding tenants and buyers for these deals and look forward to closing my first one."    

How does the market look to you? "If there is one word I could use to describe the market it would be hesitancy. From speaking with business owners and company presidents, many local businesses in the Milwaukee area are fiscally doing well, yet they are apprehensive to move forward with any major real estate decisions due to specific issues such as the uncertain and volatile state of the economy as well as the new political landscape. However, with all that said, businesses are still out there looking to expand and grow, which for brokers is always a great thing. I think businesses are just a bit more cautious in their approach and are doing more research into what they want before they pull the trigger on a real estate transaction."  

What was the best deal you've ever been involved in? "The best deal I ever got involved in was getting into this business and having an opportunity to work for MLG. It's an incredibly exciting business that I'm thrilled to be involved in."  

What was the funniest moment of your career? "I wouldn't say that there has been a single specific moment, but rather a cumulative one. During the day-to-day operations of being a broker, including cold calling, networking and attending other industry events, you meet a variety of people running the spectrum of personalities. Some of the people you meet are pretty unique (to say the least) and at times can be some of the most entertaining people you can ever imagine. But it's a part of this business that I love and really enjoy. It certainly keeps things interesting and unique."

Craig Zetley, the chairman of the city of Milwaukee's Board of Zoning Appeals (BOZA) announced that he will step down on Nov. 24. Milwaukee Mayor Tom Barrett is appointing attorney Catherine Doyle, the sister of Gov. Jim Doyle, to replace Zetley as BOZA chair. Zetley was the chairman of BOZA for 11 years.

Brookfield-based Shorewest Realtors recently added Sherry Franecki as a sales associate in its Mukwonago office.

Milwaukee-based RFP Commercial's retail group represented Cricket Communications Inc. and X-Cell Communications in the leasing of 11 locations in the metro Milwaukee area.

BOMA Luncheon, Wednesday, Nov. 12, 11:30 a.m., Milwaukee Athletic Club, 758 N. Broadway, Milwaukee.

BizTimes Commercial Real Estate Conference
BizTimes Commercial Real Estate & Development Conference, Friday, Nov. 14, 7:30-9:30 a.m., Italian Community Center, 631 E. Chicago St., Milwaukee.

Commercial Association of Realtors Wisconsin (CARW) Holiday Party, Monday, Dec. 1, 5-8 p.m., Milwaukee Center, 111 E. Kilbourn Ave., Milwaukee. Call (414) 271-2021 for more information.

NAIOP and CARW Market Update, Wednesday, Dec. 3, 7:30-9 a.m., Italian Community Center, 631 E. Chicago St., Milwaukee. Call (262) 522-6375 for more information.

IREM Holiday Party, Thursday, Dec. 4, 6:30-8 p.m., North Hills Country Club, N73 W13430 Appleton Ave., Menomonee Falls. Call (414) 476-4736 for more information.

BOMA/AOMA Holiday Party, Tuesday, Dec. 9, Westmoor Country Club, 400 S. Moorland Road, Brookfield.