Economy
Home to six Fortune 500 companies, Metro Milwaukee is known for its historically strong manufacturing and financial services industries, along with a vibrant downtown area that has experienced a strong pandemic recovery, defying national trends. The region’s unemployment rate increased 20 basis points (bps) year-over-year (YOY) to 3.6%, and overall employment decreased 0.3% YOY.
Market Overview
Metro Milwaukee’s office market recorded 150,352 square feet (sf) of negative net absorption in the third quarter, largely driven by the addition of a vacant northwest submarket asset added to the tracked inventory. Year-to-date net absorption remained positive at 45,896 sf, with eight of the market’s 12 submarkets posting quarterly occupancy gains, led by Downtown East at 87,570 sf. Overall vacancy is 23.2%, down 40 bps quarter-over-quarter (QOQ) and 100 bps YOY.
Class A properties recorded 89,376 sf of positive absorption, bringing year-to-date gains to 250,029 sf. Vacancy in this Class fell to 14.6% from 18.3% one year ago, remaining substantially below Class B vacancy at 27.7%.
Third-quarter leasing activity total 389,068 sf, including new leases and renewals, up 35% YOY. Year-to-date leasing volume reached nearly 1.1 million sf, increasing 39% from the same period in 2025. Downtown East led all submarkets with 139,945 sf leased, supported by Zizzi Health’s 41,094-sf lease at CityCenter, PNC Bank’s 40,582-sf renewal and expansion at the 411 building, and Wipfli’s 26,439-sf lease at the Huron building.
Overall gross asking rents increased 1.4% year-over-year (YOY) to $23.20 per square foot (psf), remaining within the $21-$24 psf range since late 2021. Class A asking rents increased 3.6% YOY to $28.85 psf, demonstrating continued pricing resilience continuing to outpace overall rent growth.
Outlook
With no office construction underway and Class A vacancy at 11.2% in the CBD, high-quality properties remain positioned to capture demand as tenants evaluate a narrowing selection of vacant space. As larger leasing requirements move from evaluation to execution, Class A assets are expected to remain a key driver of future absorption, while Class B properties should continue to compete effectively by offering an attractive balance of quality, location, and value.
