The office market in Madison, Wisconsin, is a mixed bag, the latest report from Colliers reveals. On one hand, vacancies saw some relief in the fourth quarter, dropping by 23 basis points to 8.93 percent compared with the previous three months.
"Class A space drove the decrease in vacancy in Q4, decreasing by 72 basis points marketwide," Colliers noted in an analysis.
Particularly, vacancies were low among Class A spaces in the Southeast and Southwest, where rates were barely above 0 percent, according to a chart posted by the CRE firm. By submarkets in general, the Southwest came in at the lowest overall, with just a 2.99 vacancy. The highest, meanwhile occurred in the West, which averaged rates of 15.92 percent. However, the category spiked by 154 basis points in 2024 compared with the previous year.
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However, demand was weak, with negative absorption totaling -308,962 square feet. This could be attributed to the poor performance of Class B space, which negatively absorbed -348,572 square feet. Class A offices were the only one in the state's capital to record positive absorption at +51,849 square feet.
On the bright side, move-ins (39) out-paced move-outs (26) in the market.
The fourth quarter ended with 100,000 square feet of new units under construction, with total inventory over 26 million square feet.
Some major recent tenant move-ins included Stevens Construction leasing 26,000 square feet of space at 10 Terrace Ct, and RDG Planning & Design occupying 11,433 square feet at 25 W Main St. As far as sales go, Paracorp Inc. stood out with its $5.1 million purchase of 34 Schroeder Ct from Wisconsin Bank Trust.
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