Madison tenants gravitated toward smaller, higher-quality office spaces, weakening the demand in the market. While the number of lease transactions being executed has nearly recovered to pre-pandemic levels, overall leasing volume in 2022 was more than 20 percent below pre-pandemic averages. Madison’s pipeline of new construction presents little concern, with only 450,000 square feet of space under construction, representing just 1.2 percent of the total inventory. While development has leaned toward owner-occupied and build-to-suit developments in recent years, a small increase in spec projects has been observed. Although current vacancies in Madison’s office market of 5.9 percent are nearly 150 basis points above prepandemic levels, Wisconsin’s state capital is notably outperforming the national average of 12.9 percent. Office users, namely healthcare, biotech, and government, have been some of the most active in the market. The back half of 2022 enjoyed a late rise of investment activity, with buyers closing on over $100 million in acquisitions. First quarter numbers paint a different picture, with less than $7 million in total sales occurring, a 70 percent drop in deal volume from the five-year high of last quarter.