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Notes:

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The Brief

• Madison, Wisconsin, ranked No. 17 among America’s top college towns for 2027 in WalletHub’s study of 415 cities across 31 metrics, including affordability, academic quality and career opportunities.
  
  
• Austin, Texas, placed first, followed by Ann Arbor, Michigan, Charlottesville, Virginia, Raleigh, North Carolina, and Atlanta, Georgia, rounding out the top five.
  
  
• The rankings considered factors such as cost of living, university quality, employment prospects, crime rates and recreational activities to help students find cities that balance academic success with affordability and quality of life.

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RSK: Seems about right!

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We offer the experience, quality and service you deserve, but with the personal attention and dedication that only a family business can provide. We’re not just your landlord, we’re partners in your success.

For years the office story was about too much space. The third-quarter numbers suggest the more pressing problem, at least at the top of the market, is too little of the right kind.

Savills’ Q3 2026 market reports show availability falling year over year in 21 of the 24 U.S. markets it tracks. Manhattan’s rate is down 280 basis points, San Francisco’s down 640. At the same time, the pipeline of new buildings has almost vanished. Cushman & Wakefield puts the Americas construction pipeline 82% below its 2020 peak, and Atlanta has no office projects under construction for the first time in 15 years. Tenants with big requirements are discovering that a market with 25% availability can still have very few good buildings with a contiguous 50,000 square feet to offer.

The pipeline has nearly run dry...

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RSK: With almost zero construction in the office market, vacancies diminish and class A Trophy space is hard to find.

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The Madison Office Lifestyle Portfolio consists of 13 Class A, amenity-rich office properties ranging in size from approximately 25,000 square feet to over 300,000 square feet and is home to more than 130 tenants. The portfolio is located on the west side of Madison and Middleton, with the majority of properties situated in the Far West submarket.

The capital flowing into artificial intelligence has reached a scale that makes previous technology cycles look modest. CB Insights put US private AI funding at $206 billion in the first quarter of 2026 alone, approaching what the entire prior year produced. That money is going into model development, data center capacity, chips, and the engineering talent required to build any of it.

Hiring engineers means putting them somewhere, and the companies doing the hiring have reached a conclusion about where that should be. Nick Romito, co-founder and CEO of VTS, has watched the posture of tech tenants reverse over the past few years. “Post COVID the tech companies were pushing back against the return to the office,” he said. “Now they are driving the return, a lot of companies are even bringing people in on Saturdays because they know they can’t win this race to innovate if they are remote.”...

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RSK: AI is helping reduce office vacancy as well. How long it will last is a question in my mind.

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“At Investors Associated, we make it easy for brokers to match clients with well managed, high quality spaces. Our team prioritizes clear communication, quick turnaround times, and a seamless leasing experience. Partner with us to provide your clients with properties backed by dependable service and long term value.”

Seattle House, a 1,131-unit development near Amazon’s headquarters, opens to its first tenants on November 15 after seven years of construction. Developed by Vancouver, British Columbia-based Concord Pacific and Seattle-based HB Management, the $371 million project features two 45-story towers connected by a 13-story podium across a half-block site. General manager Nathan Leible reported more than 200 tours and over 50 signed leases in the first four weekends of showings, though he declined to share overall occupancy rates.

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RSK: Could smaller units with more amenities be the future of apartment buildings? Seems it might work.

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A 4.66-acre parcel of land in Fitchburg zoned for mixed-use development has been sold by Fairchild Development to Louisville, Kentucky-based Trilogy Health Services for $2.23 million.

The sale was announced Thursday by the commercial real estate and investment firm CBRE, which represented Trilogy, a developer of senior living communities.

The acquisition of the land, which is located at the northwest corner of County Highway MM and U.S. Highway 14 in Fitchburg, marks Trilogy’s third location in the greater Madison market.

The company owns senior living campuses in Waunakee and Sun Prairie...

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Madison’s west side could see a housing infusion within the next three years after a vote this week of the city’s Plan Commission, which followed objections from some neighbors over a proposed development.

By unanimous vote, the commission rezoned the property at 301 S. Westfield Road, several blocks north of West Towne Mall, and approved accompanying plans that would see an existing three-story office building turned into a mixed-use, infill redevelopment.

Canada-based developer RFA’s proposal calls for 578 apartments — a mixture of studios, and one- and two-bedroom units — across four buildings, with a new east-west road running through the site. The buildings would range from four to five stories tall...

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RSK: That is a large amount of apartments, but I am sure RFA will do it right and listen to neighbors concerns where feasible.

CARW Deal of the Year Awards and Annual Meeting

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• Leasing volume continues to increase, up 6.4% in the last 12 months, with gateway markets leading growth (+13%). While gateway markets have seen the most momentum of late, Sun Belt markets and smaller tertiary markets’ activity more closely mirrors last cycle’s peaks—both have seen >95% of 2019 leasing volume in the past 12 months.
  
  
• The market registered its fifth consecutive quarter of positive net absorption with +6.0 million s.f. of occupancy gains, bringing YTD totals to +21 million s.f.
  
  
• Technology-led markets have made a notable bounce-back in occupancy gains, with many of the leading markets for YTD net absorption being technology hubs.
  
  
• Just 3.5 million s.f. of new office product was completed in Q3, matching the near-record-low delivery volume from Q2. Over the course of the quarter, 9.6 million s.f. was removed from inventory, driving another net decline in U.S. office inventory. Inventory has fallen more than 45 million s.f. from peak levels in late 2023. Only 23 million s.f. is under construction.
  
  
• Asking rates continue to marginally increase as landlord leverage is expanding more broadly across Class A markets. Asking rents grew 60 bps QoQ to $40.51 nationally.
  
  
• Effective rents have grown exceptionally quickly in trophy and new construction segments as space becomes extremely scarce in most markets.

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RSK: Subleasing space shrinks....you can download the whole report here.

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With over 350 experienced real estate professionals, Knight Barry provides exceptional support and service. Visit our website for more information about our 50+ commercial and residential offices throughout Wisconsin, Michigan, and Minnesota.

MADISON: 2450 Rimrock Road, Suite 204, 608-255-2700
CAP SQUARE: 44 E. Mifflin Street, Suite 101, 608-255-2700

The WRA has developed a new optional form to help real estate firms and agents disclose referral compensation arrangements to consumers. The WRA-DRC Disclosure of Referral Compensation provides a simple, standardized way to inform consumers when compensation may be paid in connection with a referral, without requiring disclosure of the amount.

Referrals are a common part of the real estate industry. A licensee may refer a buyer or seller to another real estate firm because the consumer is relocating, purchasing property in another market or seeking services from a firm with particular expertise. In other situations, consumers may be connected with real estate firms through relocation companies, referral networks, online platforms or other referral sources....

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RSK: A new non-mandatory form for referral compensation...

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With the largest Real Estate Practice of any law firm in Wisconsin, Reinhart offers clients custom-tailored real estate insight.

Rising competition is driving pricing for both.

Every week I talk with owners of retail and office properties who assume the debt markets have written them off. The headlines have spent years telling them so. Right now, that assumption is wrong for retail and only half right for office, and knowing the difference is worth real money at maturity.

Over the last 12 to 18 months, my team has closed approximately $150 million across six retail financings and approximately $100 million in office transactions. The two asset classes tell very different stories.

Retail: Lenders competing hard...

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RSK: Retail is still the shinning star but office is slowly coming around.

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Since 1971, St. John Properties has designed, developed, and managed spaces that fit every type of business. Our team anticipates and serves the needs of over 2,700 clients, including small, mid-sized, and large companies, nationwide.

President Donald Trump said Wednesday that he will require data centers to provide their own electricity and sell excess power to nearby communities to hold down electricity prices.


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RSK: The right way forward but is it too little too late?

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Park Towne is a family run Madison-based real estate company serving southern Wisconsin for over 50 years. Led by second generation brothers Mike, Jim and Joe Ring, Park Towne has a portfolio of for-lease commercial properties and offers development, management and brokerage services.

City leaders have changed the zoning for thousands of Madison properties in an effort to simplify permitting and allow more types of housing to be built in certain neighborhoo

By unanimous vote at this week's meeting, the City Council rezoned around 4,000 single- and two-family properties in “planned development” districts across the city. The goal of the measure was twofold, city staff said.

For one, it is meant to streamline city rules for residents and staff. Homeowners in planned development districts previously had to go through additional steps to receive approval for home projects like adding a new deck, pergola or egress window. Such measures are allowed “by right” in other residential zoning districts, creating less paperwork for homeowners and reducing staff workload.

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RSK: Check your address to see what if anything is now allowed.

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Retail vacancy continued to remain near historic lows in the third quarter.

New data from Colliers found that the national retail vacancy rate dipped to 4.3%, a decrease of 10 basis points, in the period as limited new supply continues to keep availability tight. Net absorption reached 10.5 million square feet in the third quarter, the highest quarterly total since 2023, supported by continued retailer expansion and the backfilling of available space. 

By property type, malls saw 1.9 million square feet of absorption, while shopping centers had 3 million square feet and general retail saw 5.4 million square feet get absorbed. Mall vacancy was 8.2% to end the third quarter, while shopping centers had a vacancy rate of 5.4%....   ...Full Story Here

RSK: Retail demand remains strong mainly due to not much new space is hitting the market.

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U.S. apartment concession use fell for a fourth consecutive month in September 2026, while the average discount held at a level that matches the deepest in more than 15 years.

Concessions were offered on 14.5% of stabilized U.S. units, down 0.9 points from August 2026 and the lowest reading since September 2025, according to data from Realpage Market Analytics. Concession usage has fallen for four consecutive months now, and this latest was the deepest of those monthly declines, which together have taken usage down 2.5 points from 17% in May 2026. The average concession increased modestly to 11.1% from 11%, matching the readings from June 2026 and July 2026. At 11.1%, the typical incentive equals about 5.8 weeks free on a 12-month lease.

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RSK: At this point in time. Concessions in the Madison area remain stable, and a slight decline is noticeable. But as several projects come online, that may change even if the population is still growing.

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Question:

Can a firm working with a tenant receive compensation from the property owner in a commercial lease transaction after January 1, 2027?

Answer:

Yes. The compensation restrictions established by 2025 Wis. Act 69 apply only to transactions involving residential property containing one to four dwelling units. These restrictions do not apply to commercial lease transactions.

Therefore, in a commercial lease transaction, a firm working with a tenant may continue to receive compensation directly from the property owner for brokerage services. Unlike transactions involving residential property containing one to four dwelling units, the agreement to pay compensation does not need to be included in an offer to purchase or option to purchase.

Additionally, firms may continue to negotiate firm-to-firm compensation arrangements in commercial lease transactions, subject to applicable laws and agreements...   ...Full Story Here

	The Gialamas Company, Inc.	RFA Asset Management Madison, WI	Key Commercial Real Estate, LLC
Madison Commercial Real Estate LLC	St. John Properties	IA Management, LLC	Wisconsin Commercial Real Estate
Park Towne Realty LLC	Mullins Group, LLC	Crown Commercial	Flad Development & Investment Corp.
Evans Properties, LLC	Keller Real Estate Group		MIG Commercial Real Estate, LLC
First Weber Group, Inc - West Towne	Opitz Realty, Inc.	First Weber Group, Inc - Prairie Du Sac
The Lenhart Company, Inc	Scott Faust & Associates	Shamrock Real Estate Services, LLC	Targa, Inc
Executive Management, Inc	Stark Commercial - East	Urban Land Interests	Slinde Realty Company
Assist-2-Sell/Pohlkamp & Associates	Berkshire Hathaway Home Services Matson Real Estate	Artisan Graham Real Estate

Hovde & Hovde, Inc

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