Dane County added 900 new jobs in April, reducing Greater Madison’s unemployment rate to 5.2%. The Veterans Administration is opening up this summer with 370 jobs in Middleton; Meriter Hospital is constructing a new major medical facility in downtown Middleton and another at the corner of Broadway and Stoughton Road on the southeast side.
Epic Systems is hiring 1,000 more employees over the next year in Verona, in addition to the thousands of construction jobs that will be created with the groundbreaking of its new conferencing facility; the Armed Forces has purchased more land at The Center for Industry & Commerce by the airport to expand their soon-to-be finished joint military training facility.
The University Research Park is moving ahead with its new park on Mineral Point Road that will add 10,000 to 15,000 jobs over the next two decades, and I am aware of companies on the west side that are moving ahead with expansion plans that will result in hiring many hundreds of new employees.
While the nation is slowly coming out of the Great Recession, and in spite of sporadic recoveries in various markets and industries, Madison is recovering at a much more rapid pace.
My company hears from hundreds of companies on a continual basis, and those companies are starting to hire and invest and grow. Admittedly, small companies that suffered the most during the recession are slower to recover, but because they typically serve larger companies, they too will begin to experience their own recovery later this year and into next.
Another sign of recovery: our leasing team signed 216,000 square feet of growing tenants last year, along with signing 144,000 square feet of renewals. And we anticipate that we will lease 300,000 square feet more this year.
And for the first time in three years, vacancies sit idle for less time. In a few cases with larger office suites, there are two companies competing for the same suite.
We’re even aware of a larger company that is looking for space, but there is literally nothing available that satisfies its needs in terms of size.
In addition, the Class A office market occupancy in the far west side submarket is now 90% or better (the east side will follow in less than 12 months), and our pipeline of demand is the largest in three years.
Also, we’re seeing some stirring of retail demand; in fact, we’ve started construction on a 4,500-sq.-ft. building for Fidelity in Greenway Center.
On the residential side, apartment buildings are full with little to no vacancies.
After years of stagnation, the housing market is starting to experience sales of homes over $400,000. There have been sales in the $2-million-and-over category.
Of course, there are risks. Inflation is heating up – an increase of 100 basis points (1%) in just the last two months alone is a warning sign – and there are the gas price increases. In the short term, inflation will help inflate the value of real assets (like real estate) and make the cost of paying back debt by borrowers less expensive. In the long run, however, high inflation may cause the Fed to raise interest rates. (Warning: If you have a low floating rate loan, go buy a swap and lock in your rate now.)
But hang in there. If you aren’t experiencing the economic recovery, you will soon.
P.S. I’m not a fan of President Barack Obama, but I give him credit for having the courage to pull the trigger and sending the Navy SEALS into Pakistan to kill Osama bin Laden without tipping off Pakistan. In the 1990s, President Clinton gave the Pakistanis the courtesy of informing them that we’d be using their airspace to send cruise missiles toward a terrorist base in Afghanistan, and the Pakistanis tipped off bin Laden. Not this time.
Sign up for the free IB Update – your weekly resource for local business news, analysis, voices, and the names you need to know. Click here.
