Q1 2025 Madison Market Research Office Report
Madison’s office market is undergoing a period of transition as tenants increasingly prioritize smaller, higher-quality spaces over older, outdated buildings. This trend toward rightsizing has contributed to a steady return of office space to the market, driving up availability.
Since hitting a five-year low of 2.3 million square feet (SF) in mid-2020, available office space has grown to 3.8 million SF. Madison’s current availability rate stands at 9.3%—well above historical norms, yet still significantly below the national average of 16.1%.
New office development has been modest, with just 1.5 million SF delivered over the past five years. Most of this activity has centered around headquarters expansions and build-to-suit projects for major local employers like TruStage, Exact Sciences, and the state government. The state remains a key driver of demand, actively consolidating its footprint by vacating older buildings in favor of newer, more efficient spaces. This shift has spurred the redevelopment of several prime properties near the State Capitol.
Demolition has also been a notable factor, with 770,000 SF of obsolete office space removed from the market over the past five years, helping to offset some of the increase in availability.
Despite elevated vacancy levels, asking rents have remained resilient. Over the past year, market rents have increased by 2.1%, slightly above the five-year average of 1.8%. With strong population growth and a thriving innovation ecosystem supported by the University of Wisconsin–Madison and state institutions, Madison is well-positioned for future demand growth. As a result, rent performance is expected to outpace national trends in the near term.
Since hitting a five-year low of 2.3 million square feet (SF) in mid-2020, available office space has grown to 3.8 million SF. Madison’s current availability rate stands at 9.3%—well above historical norms, yet still significantly below the national average of 16.1%.
New office development has been modest, with just 1.5 million SF delivered over the past five years. Most of this activity has centered around headquarters expansions and build-to-suit projects for major local employers like TruStage, Exact Sciences, and the state government. The state remains a key driver of demand, actively consolidating its footprint by vacating older buildings in favor of newer, more efficient spaces. This shift has spurred the redevelopment of several prime properties near the State Capitol.
Demolition has also been a notable factor, with 770,000 SF of obsolete office space removed from the market over the past five years, helping to offset some of the increase in availability.
Despite elevated vacancy levels, asking rents have remained resilient. Over the past year, market rents have increased by 2.1%, slightly above the five-year average of 1.8%. With strong population growth and a thriving innovation ecosystem supported by the University of Wisconsin–Madison and state institutions, Madison is well-positioned for future demand growth. As a result, rent performance is expected to outpace national trends in the near term.