Marcus & Millichap

Milwaukee Retail Investment Forecast

Outlook 2019

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Above-Average Income Growth Aids Consumer Spending; Retailers, Investors Magnify Footprints

Vacancy further constricts as retail development drops off. Milwaukee enters 2019 on a high note, having witnessed robust retailer demand over the past four years that translated to the absorption of 7.4 million square feet of space. A streak of strong median income growth that exceeded the national rate of increase fueled many retailers’ decision to expand or establish a local footprint. Growth by these retailers negated the combined delivery of 5.5 million square feet of new supply during the four-year window, lowering overall vacancy by 200 basis points. The metro’s ability to handle a significant wave of construction activity would seem to warrant future retail development, yet less than 100,000 square feet of space is slated for delivery this year. As incomes continue to grow at a pace that surpasses the national average, households’ discretionary incomes will rise, influencing more retailers to seek additional locations this year. Another period of strong market demand further drives average asking rents, albeit at a subdued pace compared with last year, while the metro’s vacancy rate reaches a cycle-low level.

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