Dear clients and friends,
As we wrap up the first quarter of the year, the commercial real estate market is doing better than most people think, but not as well as we would all like it to be. Several companies were pushing off decisions in 2024, which caused a dip in demand and deal flow. Despite the lingering uncertainty that characterized 2024, our brokerage team completed more than 250 individual real estate deals throughout the state of Wisconsin. That brings the total number of deals closed by NAI Pfefferle in the last five years to 1,281 – more than $875 million in total transaction volume.
- Office vacancies are stabilizing as more people return to the office and companies continue to “right-size.” Class B and C buildings continue to see the highest vacancy rates as the “flight for quality” trend continues. As tenants, investors and developers begin re-engaging with the office sector, we anticipate a gradual stabilization of the office market in 2025. Demand for larger office space, however, is still limited.
- The industrial market remains relatively healthy despite a 35% year-over-year decline in U.S. net absorption. Following a significant supply boom in 2022-2023, industrial deliveries have slowed down, but demand is expected to resume as manufacturing, warehouse & logistics, re-shoring, among other factors, continue to impact the market.
- Retail occupancy is strong locally and nationally, as the retail sector enters 2025 with the lowest vacancy rate among the major CRE sectors. Rent growth also remains steady, supported by limited new construction and sustained consumer spending. Several regional and national retailers – including quick-serve restaurants, discount and convenience stores – continue to expand their footprint in secondary and tertiary markets.
We’re very excited to welcome our new Milwaukee office to the Pfefferle Family and look forward to a productive year!r!
Sincerely,
Manny Vasquez | Partner/Vice President
mannyv@naipfefferle.com | 920.858.1075
U.S. Tariff Outlook: Key Signals to Watch in 2025 – Area Development
Commercial Real Estate by the Numbers – Chief Investment Officer
Will 2025 be a pivotal year of recovery for CRE? – World Economic Forum
The 12 Deals And Trends That Defined 2024 – Bisnow
How Automation Is Actually Closing the Labor Gap – Area Development
Big Lots reaches deal to save hundreds of stores, distribution centers – Insight
People are still refreshing their Covid wardrobes to return to the office – NBC News
Disclaimer: NAI Pfefferle cannot guarantee the completeness or absolute accuracy of the commercial real estate data provided. Information such as property values, rental rates, vacancies, and other market trends may fluctuate and is subject to change without notice. Users are advised to independently verify all data and consult with our team of qualified real estate professionals for specific advice tailored to their needs. NAI Pfefferle is not a licensed or certified real estate appraiser, and any information provided does not constitute an appraisal as defined under any federal, state or local laws. The conclusions presented in this report are estimates only and shall not be construed as a representation or warranty. NAI Pfefferle shall have any liability to any third party as a result of reliance on or use of the information, analysis and conclusions contained herein.
