Office vacancies remained virtually unchanged in much of the Northeast Wisconsin market during the first quarter of 2010, according to the most recent Grubb & Ellis Office Market Trends Report. Grubb & Ellis | Pfefferle has offices in Appleton, Green Bay and Waupaca. Grubb & Ellis is a national commercial real estate firm with offices throughout the U.S.
In the greater Appleton market, vacancy rates remained at 15 percent in the first quarter, according to Tom Scheuerman, managing broker for Grubb & Ellis | Pfefferle in Appleton, who prepared the regional reports. “There were more leasing transactions in the Fox Cities during the past six months, but the net effect on vacancies was virtually zero,” he said.
In the six-month period that ended March 31, the overall vacancy rate in the Green Bay market rose slightly from 14.7 percent to 15.5 percent, according to the report.
Within the major markets, there were notable differences, according to Grubb & Ellis. On the east side of the Fox Cities, for example, vacancies dropped from 17.9 percent to 12.2 percent as some newer spaces were absorbed on the east and northeast sides of Appleton. In contrast, the west side of Appleton and the Oshkosh office market experienced slight increases in vacancy rates, rising to 17.3 percent and 8.6 percent, respectively. “The west side of Appleton did experience some absorption, but that was more than offset by additional spaces becoming available,” says Scheuerman, “especially the Renaissance Building that now is completely unoccupied.”
In the outlying areas of the Green Bay market, vacancies rose sharply from 12 to 22.3 percent, but that was largely due to one 50,000-square-foot office becoming vacant. The east and west sides of the Green Bay market were virtually unchanged with vacancies of 13 percent and 17.5 percent, respectively.
Based on the Grubb & Ellis national report, Northeast Wisconsin is doing better than much of the rest of the country. The National Office Market Trends Report notes that vacancy rates “rose at a faster pace in the first quarter than in the fourth quarter of 2009” – rising from 17.4 percent in the fourth quarter of 2009 to 17.9 percent in the first quarter of this year.
Nationally, there are some tentative signs of improvement, according to the report. “Asking rental rates, although they continued to deteriorate, did so at a slower pace in the first quarter, and available sublease space declined for a second consecutive quarter.”
Grubb & Ellis analysts say they expect the national leasing market to bottom out by the end of this year with a gradual recovery getting underway in 2011.
In the Appleton market, “there is increased activity in the office marketplace and substantial opportunities for tenants seeking smaller spaces.”
Rent in the Green Bay area remains steady, “with opportunities for tenants to negotiate very competitive lease terms as landlords strive to reduce vacancies that have been in existence for extended periods,” according to Scheuerman