Madison-2015Q4-OFF - Broadwing Advisors

OFFICE MARKET REPORT
Madison
4th Quarter 2015
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
Table of Contents/
Methodology of Tracked Set
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professionals, appraisers, owners, investors and developers that make strategic decisions to lease, sell,
buy and develop commercial properties.
Table of Contents/Methodology of Tracked Set
2
Office Market Map
3
Madison Office Overview
Statistics by Market
Vacancy Rates & Asking Rates
4-5
6
7-8
Leasing & Absorption
9
Office Advisory Board Members
10
Xceligent Madison Team
11
The Madison tracked set consists of an inventory of buildings considered to be competitive within the
brokerage community. All buildings within the competitive tracked set have been reviewed and verified by
members of the Advisory Boards for each market area.
Inventory
The total square feet of all existing multi tenant office buildings greater than 10,000 SF, excluding medical, government
and owner occupied buildings.
Class A
Most prestigious buildings competing for premier office users with rents above the market average. Buildings have high
quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.
Class B
Buildings competing for a wide range of office users with average market rents. Building finishes are fair to good for the
area and systems are adequate, but the property does not compete with Class A product.
Class C
Buildings competing for office users requiring functional office space at rents below the market average for the area.
Total Available SF
All of the available leasable space within a building, whether it is occupied or vacant, for direct lease or sublease space.
Space can be available but not vacant, for example, if the landlord, or his agent, is marketing space that will be coming
available at a future date because a tenant is planning to move.
Total Vacant SF
The total of all of the vacant square footage within a building, including both direct and sublease space.
Direct Vacant SF
The total of the vacant square footage in a building that is being marketed by an agent representing the landlord.
Sublease SF
Space that is offered for lease by a current tenant, or his agent, within a property. Whether the tenant is paying rent or
not, the space is considered vacant only if it is unoccupied.
Net Absorption
The net change in occupancy from quarter to quarter, expressed in square feet.
Weighted Average
Direct Lease Rate
The weighted average of all direct asking lease rates expressed as a full service/gross rental rate and weighted on total
direct available square feet. Non-full service rates (such as NNN) have been grossed up to reflect a full service/gross
rate.
CBD
The Downtown/Campus submarket.
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
2
Office Market Map
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
3
Madison Office Overview
Overview

Through the fourth quarter of 2015, the Madison office market absorbed 201,192 square feet. At 11.0%, the fourth
quarter regional vacancy rate improved .2% from the 11.2% reported last quarter.

Year-to-date, the Madison office market absorbed a total of 429,014 square feet. The regional vacancy rate is down
by 2.1% from the 13.1% reported at the end of 2014.

The West submarket experienced the largest positive absorption of the quarter with 122,258 square feet absorbed,
while The Far West submarket experienced the largest negative absorption with (41,296) square feet absorbed.

Class B office space out performed class A and class C this quarter, with 185,741 square feet absorbed, (10,736)
square feet absorbed, and 26,187 square feet absorbed, respectively.

Three projects were delivered this quarter: 2440 Deming Way, 828 John Nolen Dr, and 2501 Parmenter St; adding a
total of 145,588 square feet of Class B inventory.
Historical Vacancy Rate & Net Absorption
250,000
13.5%
200,000
13.0%
12.5%
150,000
12.0%
100,000
11.5%
50,000
11.0%
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
10.5%
(50,000)
10.0%
(100,000)
9.5%
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
4
Madison Office Overview
Historical Vacancy Rates by Class
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2014 Q4
2015 Q1
2015 Q2
A
B
2015 Q3
2015 Q4
C
Historical Net Absorption by Class
200,000
185,741
150,000
100,000
61,843 63,035
57,505
50,136
50,000
26,373
26,187
22,897
2,965
5,764
2014 Q4
(8,096)
(14,599)
2015 Q1
(11,187)
2015 Q2
2015 Q3
2015 Q4
(10,736)
(50,000)
(57,383)
(100,000)
A
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
B
C
5
Statistics by Market
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
6
Vacancy Rates & Asking Rates
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
7
Vacancy Rates & Asking Rates
Vacancy Rate by Market
15.7%
14.7%
9.1%
9.0%
6.7%
West
East
Far West
Downtown
South
Madison
Weighted Average Asking Rates by Market
$20.86
$20.49
$19.21
$19.17
$16.88
Far West
Downtown
West
South
East
Madison
Asking Lease Rate Range by Class (FSG)
$35.00
$31.00
$30.00
$25.00
$20.00
$24.50
$24.00
$23.50
$21.00
$17.03
$15.00
$13.65
$10.00
$8.00
$6.00
$5.00
$A
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
B
C
8
Leasing & Absorption
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
9
Office Advisory Board Members
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
10
Xceligent Madison Team
This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we
have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to
independently confirm its accuracy. For more information, please contact :
Blake Ayer
Regional Director of Analytics
(414) 943-4215
[email protected]
James Bertolli
Director of Client Services
(949) 306-8767
[email protected]
2015 Q4 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
11