Over the last five 5 years, Dane County, Wisconsin has realized tremendous growth. The population has grown by 35% while wages have increased over 20%. This growth has led to an increased need for residential housing and commercial office space, which has been primarily driven by management and information companies in the private sector. Employment growth projections anticipate an additional 30% increase in management companies and enterprises over the next five years.
Since 2014, the office market in Dane County has benefited greatly from this growth. Class B vacancy rates have decreased by 7.6% (currently 8.9%), while the average GSF for Class B properties in 2017 was over $19 per s/f. Through value-added strategies and improvements, we see this as an opportunity to incrementally increase rents to market averages, thus increasing the value of the property over time.
According to the Bureau of Labor Statistics, the unemployment rate for the Madison Metropolitan Statistical Area dropped .7% from May 2016 to May 2017 (2.2%). This rate is considerably lower than the US average of 4.3% and is the lowest unemployment rate since 2001. Since 2015, job creation in office-using jobs (information, professional and business services, tech and financial services) totaled 6,400 jobs while 1,100 manufacturing jobs and 2,100 transportation jobs were created during this same period.