Madison’s office rental market has contracted almost 10% since the beginning of 2020, the Wisconsin State Journal reports.
According to data from Madison-based Broadwing Advisors, prior to the COVID-19 pandemic and resulting shift toward remote work, the Madison area had 18.2 million square feet of leasable office space.
That number is now down to 17.5 million square feet as companies seek smaller, nicer spaces for often hybrid staff. Buildings that are too large or dated, meanwhile have given way to more in-demand uses such as housing.
The trend is having the biggest impact on Class C buildings, which have had the highest vacancy rate over the last five years. While downtown demand for office space has remained fairly stable, it has lagged other growing sectors.
Some property owners are opting to demolish older office buildings or renovate them for a new purpose.
A Broadwing Advisors report shows that Madison’s office space vacancy rate rose from 11.2% in early 2021 to 16% in early 2025, although it dropped slightly between the first and second quarters of this year for the first time since 2023.
The rate downtown was 14.9% as of the second quarter, up from 12.3% a year earlier.
