Madison’s commercial real estate vacancies climbing

MADISON (WKOW) – Office space available for rent in Madison is as ubiquitous as a Wisconsin badger.

Craig Stanley, a commercial real estate consultant at Broadwing, said, “We have seen a four and a half percent increase in vacancy in the office market.”

Experts say the vacancy rate of office space in Madison was a healthy 8 percent prior to the pandemic, and the city’s vacancy rate is currently just over 12 percent. Stanley says this is worrying.

Stanley said, “Anything below 12% is considered very, very healthy, and the reason that office vacancy rates are rising is because employers offer their employees a hybrid work environment. More people are working from home, companies are downsizing or giving back when the lease expires, giving back their place because their teams are at home. “

That means many employees now want flexibility in the number of days they report in an office, with more than 66 percent of Madison employees preferring a hybrid work situation, according to the brokerage association.

With commercial real estate vacancy rates rising, experts warn that the volume of business lunches could disappear from the menu.

Stanley said, “I think one of the critical factors that has a secondary impact on office space reduction is that you will see an impact on side businesses like restaurants and demand for restaurants throughout the day. The real challenge for companies right now is When do you have your own workspace? “

Stanley added, “It may take more than three years for US vacancy rates to return to normal.”