All eyes on Manpower

Last updated on May 13th, 2019 at 02:34 pm

A year after local real estate professionals played the GE Healthcare sweepstakes game, they are going through the same process again with Manpower Inc. And the stakes are high. GE eventually decided to build its $89 million, 506,000-square-foot expansion in the Milwaukee County Research Park in Wauwatosa. Earlier this year, Glendale-based Manpower disclosed that it is seeking proposals to consider alternative locations for its corporate headquarters. Manpower is seeking 230,000 to 260,000 square feet of office space to house about 850 employees. The company is expected to announce its decision later this year.
The staffing company says it is looking at locations in downtown Milwaukee, the far northwest side of Milwaukee, Glendale, Wauwatosa and West Allis. In West Allis, the company is considering the massive office complex created by the redevelopment of the former Allis Chalmers factory.
Manpower ultimately could decide to stay at its current location in Glendale, where the company occupies 237,000 square feet of space in two buildings on North Ironwood Road and one building on North Lydell Avenue.
"I don’t know why they would leave that area," said John Czarnecki, vice president of Apex Commercial Inc. "I bet they are talking to Bayshore (Mall). I just don’t see them leaving the north shore."
The $300 redevelopment of Bayshore Mall into the Bayshore Town Center in Glendale includes about 190,000 square feet of office space.
The Manpower deal will be the most significant office space development in the Milwaukee area since GE Healthcare decided to move 2,100 employees to work in Wauwatosa.
"I know lots of (businesses) are looking at the Wauwatosa area," said Nancy Welch, director of community development for Wauwatosa. "It’s centrally located and an attractive place to be."
If Manpower comes to Wauwatosa, it would likely be in one of four places, Welch said: the Milwaukee County Research Park; the Mayfair Road corridor; the Burleigh Triangle; and an area in the Milwaukee County Grounds slated for development and located northeast of U.S. Highway 45 and Watertown Plank Road.
The 70-acre Burleigh Triangle is located northeast of Highway 45 and Burleigh Street, and is the site of large warehouses vacated by Kohl’s Food Stores and Roundy’s Inc. Wauwatosa officials are planning to redevelop the Burleigh Triangle with a mixture of residential, retail and office development.
GE Healthcare’s decision to build its new headquarters in Wauwatosa was a major missed opportunity for downtown Milwaukee. GE Healthcare strongly considered locating its headquarters in the proposed Ovation Plaza office tower development at the northwest corner of State and Water streets. That would have been a major coup for downtown Milwaukee, but GE Healthcare chose Wauwatosa instead.
City officials are hoping to grab this opportunity and are trying to convince Manpower executives to choose Milwaukee.
"We’ve been engaged with Manpower since the beginning of the process," said Rocky Marcoux, commissioner of the Department of City Development. "We’d be extremely happy to have them come into Milwaukee. We are the leading city in this region. We feel for them to come into the city would be advantageous for them."
The city will work with developers who are trying to lure Manpower as a tenant, Marcoux said.
"Many developers come forward with plans and what their needs are," he said. "We will look at those options on a case by case basis."
Irgens Development Partners LLC is developing the GE Healthcare building in Wauwatosa and has also proposed the Ovation Plaza development.
Irgens is one of several firms that hope to build a new high-rise office building in downtown Milwaukee if they can land an anchor tenant.
Manpower would be the perfect anchor tenant for one of the planned downtown office high-rises.
While Manpower officials say the company is considering downtown locations, the firm also wants to have free parking for its employees, which could make a downtown deal more difficult.
Another office tenant that could trigger construction of a new office building in downtown Milwaukee is the Godfrey & Kahn S.C. law firm. Godfrey & Kahn is considering a move from the downtown Marshall and Ilsley Bank office building at 780 N. Water St. to Ovation Plaza or to a mixed-use building being planned by U.S. Bancorp next to the 42-story U.S. Bank Center at 777 E. Wisconsin Ave. Godfrey & Kahn might also decide to stay in the Marshall and Ilsley building.
The law firm will most likely announce a decision about its office space plans by the end of this month, said managing partner Richard Bliss. If the company decides to move, it would provide the anchor tenant necessary for Ovation Plaza or the U.S. Bank project to move forward.
Although the U.S. Bank building is a finalist for the Godfrey & Kahn deal, the planned building is not being considered by Manpower, said Joe Ullrich vice president of corporate real estate for U.S. Bank.
Several other companies are quietly considering moves to one of the proposed downtown office buildings, said Steven Palec, senior vice president of the office property group for The Polacheck Company Inc. A downtown building plan could go from concept to reality if one of those potential tenants decides to move in.
"I would not be surprised to have something shake out by the end of the year to precipitate another (downtown) building getting under way," Palec said. "For every announced (office tenant) that’s out there visible in the marketplace, there are usually three or four others poking around quietly. I get scared when there aren’t others poking around quietly. There are enough of those that gives me optimism that something is going to happen with one of these (planned) downtown buildings."
However, not everyone is as optimistic about prospects for a new downtown office building.
"These new buildings always get talked about, but truly they are just floating ideas around," Czarnecki said. "What these guys do is they do a drawing, send it around, if they get a tenant, they do the deal. If I own a city block downtown, why not float it? I think this stuff tends to be more pie in the sky."
More national retailers discovering Milwaukee area
Several major retail projects are either being planned or are already under construction in the metro area. Many of those retail developments are bringing new stores into the Milwaukee area, changing the region’s shopping lineup.
This fall, Crate and Barrel will open a store at Mayfair Mall. The popular home furnishings retailer is based in the Chicago area and has 115 stores, but none in Wisconsin.
Earlier this year, the first Cheesecake Factory restaurant in the state opened at Mayfair Mall. The restaurant has been so popular diners often have to endure long waits for tables.
Brookfield Square Mall this year added a Barnes and Noble book store, which replaced the Barnes and Noble across Bluemound Road, and the first Bravo! Cucina Italiana restaurant in the Milwaukee area. Later this year, the first H&M store in the area will open at the mall. Next year, a Fleming’s Prime Steakhouse, Abuelo’s Mexican Food Embassy restaurant and an Organized Living store will open at the mall. All are new to the Milwaukee area.
Southridge Mall this year added Cost Plus World Market, and Steve & Barry’s University Sportswear will open in the mall by the end of this month. It is the first southeastern Wisconsin location for Cost Plus World Market and the second for Steve & Barry’s.
The Milwaukee area is finally attracting some national retailers that for years have bypassed the metro area in favor of larger markets. Ikea is scouting the Milwaukee area for locations to build a store. The massive redevelopment of Bayshore Mall, which will be completed next year, could provide a place for more national retail chains to enter the Milwaukee area.
"I think there was really a need for this kind of retail that we are getting," said Peter Glaser, vice president at Polacheck. "I don’t think we have enough of it."
Several shopping centers have changed hands in the Milwaukee area this year. Arlington, Va.-based Mills Corp. purchased Southridge from New York-based Blackstone Real Estate Advisors. Midtown Center, the shopping center built at the former Capitol Court site, was sold by Milwaukee-based Boulder Venture to Oak Brook, Ill.-based Inland Western Retail Real Estate Trust Inc. New York-based Ashkenazy Acquisition Corp. plans to complete its purchase later this year on The Shops of Grand Avenue in downtown Milwaukee, buying the mall from Northwestern Mutual Life Insurance Co.
Despite a housing boom in downtown Milwaukee, the downtown area still has limited shopping opportunities. Several locally owned boutique stores have opened in the Historic Third Ward in recent months, but few national retailers have opened stores in the downtown area. OfficeMax is planning to open a store later this year in the Shops of Grand Avenue.
Downtown residents need to patronize downtown stores to encourage more retailers to come into the neighborhood, Glaser said. Too many downtown residents are shopping elsewhere, he said.
"It’s really a matter of getting people who live downtown to shop downtown," he said. "(But) there’s not many options yet. The residential (development) needs to come first. There still needs to be more of it. We’re headed in the right direction."
Industrial development expected to pick up
Vacancy rates for industrial real estate in the Milwaukee area are lower than the rates in most metro areas in the United States. The Milwaukee rates will continue to fall, as activity is increasing, real estate professionals say.
"We’re seeing vacancy rates slowly decline," said James Barry III, president of Colliers Barry. "The transaction volume is increasing. There are more prospects in the market than we have seen in the last several years."
Despite the low vacancy rates and the improving economy, fewer industrial developments occurred in the first half of this year than some real estate professionals had expected.
More plans for development of industrial space could move forward in the second half of this year as vacancy rates continue to drop, real estate professionals said.
"There really has been a lack of new construction for the last several years," said Barry Chavin principal with NAI MLG Commercial. "I think you’re going to see one or two (industrial buildings) breaking ground (in the next six months)."
Developers want to sign an anchor tenant before starting construction, rather than building an industrial facility 100 percent on speculation, Chavin said.
"You’re going to start to see a couple 50 percent or 25 percent pre-leased buildings come out of the ground," he said. "You’re not going to see the spec development that we had four or five years ago. You many never see that again, because the industrial market has changed."
Larger industrial buildings are having better luck attracting tenants than smaller buildings, said Chad Vande Zande, principal of Grubb & Ellis|Boerke Co. For example, South Milwaukee-based Bucyrus International Inc. expanded by leasing 100,000 square feet in the former Metso Minerals complex at 3073 S. Chase Ave. in Milwaukee.
"Bigger buildings are leasing, smaller buildings are sitting," Vande Zande said.
However, Barry said smaller buildings are selling at a higher price per square foot, and some larger industrial buildings are struggling to find tenants, he said.
"New space with higher rates is taking a longer time to lease up," Barry said.
Falling vacancy rates could bode well for the City of Milwaukee’s plans to attract industrial development to the Menomonee River Valley and the former Tower Automotive site. A business park being developed by the city on the west side of the valley near Miller Park will not be ready until 2006 or 2007, but city officials are actively marketing it, Marcoux said.
"There’s great interest in the valley," he said. Palermo Villa Inc. has already committed to building a facility in the city’s Menomonee Valley industrial park.
Plans could come forward for new industrial parks in outlying areas, such as Jefferson County, where land is less expensive, Barry said.
Downtown casino?
The wild card in the Milwaukee-area commercial real estate marketplace is the possibility that the Potawatomi Bingo & Casino will move from the Menomonee Valley to downtown Milwaukee. If that happens, it would free up more land for industrial development in the valley and would add another attraction to downtown Milwaukee. Opinions vary as to whether or not a casino in downtown Milwaukee would be a good thing.
"The Potawatomi Tribe is an asset in the valley, but they would certainly be an asset in the downtown," Marcoux said.
The casino will not move downtown this year, but the political debate about the idea could be settled in the next six months, Marcoux said.
"I think it’s in everyone’s best interest to bring closure to it," he said.

July 8, 2005, Small Business Times, Milwaukee, WI

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