Companies strive for Class A offices in Milwaukee

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Milwaukee’s office market had a rocky start in early 2025, but commercial real estate experts said the metro market was still resilient.

Milwaukee offices saw 97,290 square feet of negative net absorption, which means more tenants have physically moved out over moving in, across all building classes, a report from Jones Lang LaSalle showed.

Class B spaces took the hardest hit with 77,683 square feet lost, the JLL report showed. Companies left the Wauwatosa area, downtown and the North Shore which drove most of the lost floor space.

Offices emptied steadily in the last quarter of 2024 as users left behind Class B and C offices the most, the report showed. But vacancies in Class A spaces slowed down and were outperforming the rest of the market, the report showed.

Businesses want more Class A space, or offices where rents are higher than average, because of the amenities and quality they offer, real estate experts have said. Some companies opted to leave their current space for something smaller and more fitting, a trend driven by the fallout of the COVID-19 pandemic.

Purely by the numbers, the JLL report found this trend was still strong. Class A buildings made up 55% of new leases and Class A renewals made up 40% of transactions in the start of 2025, the report showed.
The total vacancy rate in the Milwaukee area was 24.1%, the report showed.

The asking rent for Class A space was $25.85 per square foot. Overall direct asking rent was $22.31 per square foot.

No pure office space is under construction in Milwaukee, but mixed-use projects are underway.

Zywave leaves space in Wauwatosa, companies such as Clarios clear out

Zywave, an insurance tech company, moved out of 39,109 square feet of space on the fourth floor of their headquarters at 101000 W. Innovation Drive, JLL reported. The company kept its space on the third floor.

In 2023, the company moved 100 of its U.S. jobs to the Philippines, local outlets reported.

Clarios left 30,456 square feet at 5757 N. Green Bay, Artisan left 22,100 square feet at 777 E. Wisconsin and Tribus Services moved out of 19,113 square feet at 11020 W. Plan Ct., JLL data showed.

There were a handful of move-ins, but that didn’t outweigh the footage companies moved out from, JLL officials noted.

At 215 N. Water, three vacancies added up to 17,700 square feet of floorspace left behind, adding to the impact on Class B properties, JLL officials said. 400 E. Wisconsin Avenue saw several small vacancies that snowballed into 11,000 square feet of negative absorption, officials added.

Leasing activity up over the last quarter

One bright spot was a rise in leasing compared to last quarter, JLL officials said. A total of 194,925 square feet of space changed hands in the first quarter of 2025, a 50% increase compared to 129,749 square feet leased in the fourth quarter of 2024, officials added.

The average deal size was higher too, rising from 6,179 square feet in the fourth quarter of 2024 compared to 6,866 square feet in the first quarter of 2025, JLL officials said. That’s an 11% increase, they added.

Milwaukee office market remains stable compared to COVID years

JLL officials said the office market in early 2025 was more stable compared to the first quarter of 2021, where 197,329 square feet of leasing activity was recorded.

Leasing in 2025 so far has been lower than years before; in 2022 and 2023, there were four times in both years where JLL saw deals for properties 25,000 square feet or more, officials added.

Companies are choosing to expand and renovate in the city

In the first quarter of 2025, JLL officials said they saw activity across all property classes, with Class A properties making up 58% of leases and Class B for 42%. In the Milwaukee area, firm officials said they saw renewals made up 40% of transactions, new leases at 23% and expansion at 19%.

A highlight this quarter was AECOM renewing a lease for 26,860 square feet at 1515 N. Rivercenter, JLL officials noted.