Recent Market Report Points to Continued Growth, Development for Eau Claire
NAI Commonweal's 2024 commercial real estate report talks office, retail, industrial standings
“The 2 C’s,” a strong industrial market, and an increase in multifamily unit vacancies are just some of the main takeaways from NAI Commonweal’s annual market report. The recently released data covers the Eau Claire area, including Altoona and Lake Hallie, and is divided into three sections: office, retail, and industrial.
In general, vacancy was up across the board in 2024, which isn’t necessarily a negative thing. For example, while the report seemingly notes a dramatic increase in industrial vacancy – rising from 1.86% in 2023 to 7.30% in 2024 – the uptick is almost entirely due to the 700,000 square-foot site that previously housed Hutchinson Technology Inc. (HTI/TDK).
“If you remove the HTI/TDK space, the vacancy rate is around 1%, so if the Eau Claire market is able to attract new businesses to locate here, there will need to be additional space added in the market to accommodate those new users,” Ryan Erickson, director of brokerage services, explained. “Industrial continues to be the strongest of the sectors, with a very low vacancy rate, excluding the one large vacancy in the market.”
"What we know is Oakwood Hills in general is one of the strongest, if not the strongest, retail areas in the state of Wisconsin ..." –Ryan Erickson, NAI Commonweal director of brokerage services
While housing continues to be a hot topic (particularly “affordable” housing), Erickson noted less demand to fill the new, larger scale developments in the downtown Eau Claire area. Over 460 multifamily units were added in 2024 alone, which contributed to the nearly 2% increase in vacancy noted in the report.
Over in the retail realm, the report pointed to “the 2 C’s”: coffee and chicken. With the addition of Raising Cane’s in 2024 – preceded by Chick-fil-A in 2023 – and the new locations for 7Brew and Scooter’s Coffee planned for 2025, the area is increasingly attractive to quick-service eateries.
Just one big box retail vacancy remains in the market: the former Sears store attached to the Oakwood Mall. “It’s understandable to hear the questions surrounding Oakwood Mall and what could happen in the future and it remains to be seen,” Erickson said. “We think what happens will likely depend on what happens to the rest of the mall.
“What we know is Oakwood Hills in general is one of the strongest, if not the strongest, retail areas in the state of Wisconsin and we think that bodes well for what eventually happens with the Oakwood Mall and any potential redevelopment.”
Over in the retail realm, the report pointed to "the 2 C's": coffee and chicken. ... the area is increasingly attractive to quick-service eateries.
The Oakwood Hills area – on the south side of town – is also seeing several major redevelopment projects right now, including the addition of office buildings, something Eau Claire currently lacks. Erickson said office users are trending toward Class A office space (newly constructed, high-end builds) and expects to see new developments in that sector in 2025. Currently, Hoeft Builders are working on a new office building for The Sevens project, which will open sometime this year.
For the first time in the report's nearly 20 years, NAI Commonweal will include Chippewa Falls in its market overview starting next year. “To get a better overall sense of the commercial real estate market in the Chippewa Valley, we think it is important to include Chippewa Falls. They have a strong industrial market and their retail has really started to take off with the addition of Festival Foods, Kwik Trip and others at the Chippewa Crossing,” Erickson said.
Overall, NAI Commonweal deems Eau Claire a strong regional market across all sectors and expects additional interest and development to grow over the next year.
View the full 2024 NAI Commonweal Market Overview document for the Eau Claire area online.