Milwaukee Retail Market Report

The metro’s retail sector on solid footing entering a potentially turbulent stretch. The Milwaukee metro could experience a stark pullback in retail fundamentals during 2023, after notable strides were made across the previous two years. During this period, the metro added less than 300,000 square feet of space, coinciding with six straight quarters of positive net absorption. This performance pushed metro vacancy to its lowest point on record. Single-tenant demand is to credit for the metro’s improvement. Making up over 80 percent of Milwaukee’s inventory, this retail segment averaged the second-lowest availability in the Midwest, behind only Columbus. A slowing local economy, continued net out-migration, declining retail sales growth and continued pressure on the lending environment, however, will diminish tenant demand in Milwaukee. This results in negative net absorption this year for the first time since 2020. At the same time, minimal construction activity should help preserve fundamentals to some degree. The lack of new retail space coming online directs expanding vendors to existing floor plans, particularly in the Washington County submarket where development is barren.