Madison Street Beat

MADISON STREET BEAT– Q4/22 

Occupancy rates rose slightly on a year-over-year basis as the vacancy in the market continues its gradual trend down since early 2021. It is beginning to appear that the majority of tenants are becoming comfortable with their current space allocation and, in some instances, are seeking to expand. Limited speculative construction of new office buildings is expected to keep the market stable in the coming years.

Office property transactions in Madison saw another strong quarter to close out the year. Sales volume was slightly higher year-over-year and total volume of transactions in the last 2 quarters has now exceeded all of 2020 and the first half of 2021 combined.

While one of the most watched deals was for a life science conversion at 8402 Excelsior Drive, the largest transaction was a medical office investment by Spirit Realty, a REIT based out of Dallas, TX. The 112,000 square foot property at 2650 Novation Parkway is 100% occupied by UnityPoint Meriter and Quartz Health Solutions and sold for $19.75M. This deal represents the first significant office investment in Madison by an out-of-state buyer since the pandemic.

Madison Street Beat  is a snapshot of key metrics for the Madison area office space market developed by Compass Properties. Information contained in this report is general with regard to the subject matter and should not be construed as a recommendation to make any real estate investments or any other financial transactions.  Neither Compass Properties nor any of its employees and agencies warrant the accuracy or assume any liability for information contained in this report.