The Milwaukee area’s 15.6-million-square-foot community-neighborhood shopping center market has been going nowhere for a year, with only modest quarter-to-quarter fluctuations. In the second quarter 23,000 square feet of negative net absorption pushed the vacancy rate up 20 basis points to 12.8%, reversing a first quarter decline. The rate edged down to 12.7% in July. Both the average asking rent and the average effective rent edged up 0.1% during the quarter, to $15.03 psf and $13.35 psf. But rents were down 0.1% by both measures from a year earlier. Another 0.1% increase for each followed in July. Reis predicts a vacancy rate of 12.7% and rent gains of around 0.5% for 2012 as a whole.
No retail space of this type has completed thus far in 2012, and virtually none has come on line since the start of 2009. The 17,500-square-foot Community Financial Shopping Center in Milwaukee broke ground in 2007 but never completed construction. Reis predicts activity will pick up again next year, as net absorption rises to 244,000 square feet and new supply comes in at 215,000. The vacancy rate is expected to slip to 12.4% at the end of 2013 and continue falling until 2015. The average asking rent is forecast to rise 1.4% next year, with the average effective rent up 2.0%. Annual gains of 3.0% to 4.0% are forecast to follow.
The only development activity of the past few years has been the construction of freestanding individual stores by national chains. A few more are moving forward, according to the Journal-Sentinel. “Meijer Inc.’s combined supermarket-discount store planned for Grafton received final zoning approval from the Village Board. Also, the Meijer store proposed for Franklin received zoning approval from the Common Council.” And Meijer is seeking to develop a store in Wauwatosa at the site of the old Stroh Die Casting plant, this source reported.