Market Summary

Several Big Announcements in the Metro Milwaukee market in Q3! Amazon.com 1 million SF fulfillment center, Hana Cylinders 100,000 SF Pleasant Prairie facility, Kenall Manufacturing announcing a 354,000 SF manufacturing plant, proposed 78,000 SF manufacturing facility for Pro Mach in Pewaukee, Technical Metal taking a 100,000SF plant in New Berlin, and the former Triad HQ site being absorbed by PM Plastics. At 6% overall vacancy in the industrial marketplace, a SPEC building is no longer a 4 letter word!

Q3 2013 - The Data

SE Wisconsin Industrial Vacancy rate is down to 6.0%. 1.4 million SF of quarterly space absorption was fastest pace in 1 year. Waukesha County is now at a vacancy rate of 3.7% and posted a performance of 393,782 SF of positive absorption in the quarter. Kenosha County is down to a vacancy rate of 4.4% and continues to be the strongest market of interest for projects in the 100,000SF + Range as well as outside investment. Subtracting Milwaukee, there are only 60 total spaces in excess of 50,000 SF available within the entire region.

Q3 2013 - The Trends

Pricing for owner/occupied industrial buildings in the 10,000-30,000SF range has posted a stellar performance in 2013. Well conditioned assets in this size frame are within 5% of peak prices of early 2008. Troubled asset market on the industrial side has effectively cleared. Fewer tenant choices and more favorable landlord terms continue. We are still not in a robust economic recovery. Sellers/ Landlords need to effectively walk the fine line of a dwindling supply base and a customer base that is still reticent to commit to long term projects. While conditions continue to improve, everyone still wants a deal!

Q3 2013 - The Forecast

Businesses continue to invest in technology and facilities to upgrade their operations. This is not translating into a surge in hiring. This bodes well for the industrial market place and points to the continued stagnation of the office and retail marketplace. Kenosha County still has several large users circulating in the market. With a diminished supply base, expect private sector industrial construction to show strong improvement in 2014.

1285 Sunnyridge Road Pewaukee, WI 53072 262.695.8800 www.judsonrealestate.com

Wisconsin Industrial Market Leaders

Contact Jeff Hoffman, SIOR, CCIM 262.695.8800

jhoffman@judsonrealestate.com