Competing forces are changing the challenges and opportunities in commercial real estate.

Milwaukee’s commercial real estate market continues to flourish, but rising interest rates and construction costs, tariffs, workforce issues and changes in retail could stall growth.  The Milwaukee Business Journal recently assembled a panel of experts to explore how developers, tenants and occupiers are addressing the challenges and opportunities facing southeastern Wisconsin.

TRACY JOHNSON: How would you characterize today’s commercial real estate market?  What’s hot, what’s not and what’s changed since the beginning of the year?

DEBBY TOMCZYK: The real estate market continues to be very hot.  We’ve got historically low cap rates and there’s a lot of capital coming in from outside the market looking for a place to land.

MIKE KLEBER: Vacancy rates in industrial are at historic lows.  Class A institutional quality buildings – 28-foot ceilings and above, and usually located on a corridor – are the most sought after.  National REITs and international dollars are starting to come into the market.  They are compressing the cap rates, which will benefit the Milwaukee submarket.  As cap rates on Class A buildings are compressed down, rates on Class B properties should follow suit, which will benefit Milwaukee owners who have been holding properties for a while.

Read the entire article at Milwaukee Business Journal