MILWAUKEE OFFICE MARKET OVERVIEW Jim Cavanaugh December 2, 2013.

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MILWAUKEE OFFICE MARKET OVERVIEWJim Cavanaugh

December 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 Rate

Class B Vacancy Rate

Va

ca

nc

y R

ate

Q4

12

Q1

Q2

Q3

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

16.0%

17.0%

18.0%

2013

Va

ca

nc

y R

ate

Q3 2013 Class A Statistics

Vacancy Rate 12.4%

YTD Absorption 39,815

Q3 2013 Class B Statistics

Vacancy Rate 16.8%


3

Class A Asking Lease Rates (Gross)

Period Rate

Q3 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)

Av

g.

As

kin

g L

se

. R

ate

(G

)

Q4

12

Q1

Q2

Q3

$14

$15

$16

$17

$18

$19

$20

$21

$222013

Av

g.

As

kin

g L

se

. R

ate

(G

)

Class B Asking Lease Rates (Gross)

Period Rate

Q3 2013 $16.87

4


Vacancy Rate 16.0%


DOWNTOWN EASTSubmarket Statistics

2010

2011

2012

2013

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Four-Year Period

Va

ca

nc

y R

ate

Recent Lease Transactions US Bank

• 615 E Michigan St

• 110,636 SF

• Renewal

Michael Best & Friedrich

• 100 E Wisconsin Ave

• 89,725 SF

• RenewalQ4

12

Q1

Q2

Q3

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%2013

Class A Vacancy Rate


Va

ca

nc

y R

ate


Vacancy Rate 9.2%


5


Vacancy 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

Va

ca

nc

y R

ate

Recent Lease Transactions UMB

• Schlitz Park

• 88,000 SF

• Relocation

CapTel, Inc.

• 310 W Wisconsin Ave

• 37,864 SF

• RenewalQ4

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

Va

ca

nc

y R

ate


Vacancy Rate 19.5%


7


Vacancy Rate 19.4%


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

Va

ca

nc

y R

ate

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%


Va

ca

nc

y R

ate


Vacancy Rate 9.4%


8


Vacancy 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

Va

ca

nc

y R

ate

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%


Va

ca

nc

y R

ate


Vacancy Rate 16.5%


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

Va

ca

nc

y R

ate

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

Va

ca

nc

y R

ate


Vacancy Rate 18.3%


10


Vacancy Rate 20.0%


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

Va

ca

nc

y R

ate

Recent Lease Transactions Zywave

• 10700 Research Dr

• 24,155 SF

• Expansion

Vitas Healthcare Corporation of Illinois

• 2675 N Mayfair Rd

• 11,203 SF

• RenewalQ4

12

Q1

Q2

Q3

0%

4.0%

8.0%

12.0%

16.0%

20.0%

24.0%

2013Class A Vacancy Rate


Va

ca

nc

y R

ate


Vacancy Rate 11.3%


11


Vacancy Rate 16.4%


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

Va

ca

nc

y R

ate

Recent Lease Transactions Milliman

• 15800 W Bluemound Rd

• 78,024 SF

• Renewal / Expansion

Fiserv, Inc.

• 275 N Corporate Dr

• 33,575 SF

• RenewalQ4

12

Q1

Q2

Q3

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

2013Class A Vacancy Rate


Va

ca

nc

y R

ate


Vacancy Rate 17.7%


12


Vacancy Rate 12.1%


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

Va

ca

nc

y R

ate

Recent Lease Transactions Humana

• N19 W24133 Riverwood Dr

• 40,700 SF

• Renewal

Medco Health Solutions

• N19 W23130 Riverwood Dr

• 29,704 SF

• Renewal

Q4

12

Q1

Q2

Q3

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2013 Class A Vacancy Rate


Va

ca

nc

y R

ate


Vacancy Rate 9.8%


13

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

MILWAUKEE OFFICE MARKET OVERVIEW Jim Cavanaugh December 2, 2013.

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