Two apartment building developments are moving forward in Milwaukee’s Historic Third Ward.
Construction began this week for one apartment development project in Milwaukee’s Historic Third Ward, and construction of another apartment complex in the neighborhood is expected to break ground next month.
Site work began this week for developer Robert Joseph’s Jackson Square project, an 81-unit apartment building with 9,000 square feet of retail space, which is being built at the northwest corner of East Menomonee and North Jackson streets. The five-story building is expected to be completed in 13 to 14 months, Joseph said.
Monthly rents at Jackson Square will range from $800 to $1,600, Joseph said. Half of the units will have one bedroom, and the other half will have two. The highest-priced units are two-story townhouses at the top of the building, providing views of Lake Michigan.
Another apartment development is expected to begin construction soon. Milwaukee-based Mandel Group Inc. is hoping to break ground in October for its Corcoran Lofts project, which will be located on the north side of East Corcoran Avenue and adjacent to Mandel’s Gaslight Lofts development. The project is expected to be complete next fall.
The six-story Corcoran Lofts building will have 76 apartments and 3,400 square feet of retail space. The retail space will be located at the corners of Corcoran and Jefferson and Milwaukee streets. The apartment rents will start at about $900.
The building will have parking on the first two floors and apartments on the upper four floors. It will be connected to Gaslight Lofts so Mandel will be able to use Gaslight’s operating staff to serve the building and Corcoran Lofts residents will be able to use amenities in Gaslight, such as the fitness center.
Developers say the market for apartments is strong right now. Mandel’s existing apartments are 97 percent occupied, said Robert Monnat, the company’s chief operating officer.
The national credit crunch has made it harder for buyers to get loans for condos, which is leading to more interest in apartments, developers say.
"No one has built apartments for a long time," Monnat said. While the condo market was red hot many people who used to rent were buying condos instead. Now many of those buyers have returned to the apartment market. In addition some people want to rent because they may not be living in the area long-term, and others want to rent to try out the downtown lifestyle before committing to buying.
"A lot of people still want to test the waters downtown and rent for a year (before buying a condo)," Joseph said.
According to New York-based Reis Inc., which provides commercial real estate market information, the Milwaukee area had an apartment vacancy rate of 4.1 percent in the second quarter, and the eastern part of the city of Milwaukee, which includes downtown and the Third Ward, had a 4.8 percent vacancy rate.
"We’re turning people (who want to rent apartments) away," Monnat said. "We have a ton of people looking to live in the Third Ward, and we have nothing to offer them."
Apartment rental rates in the Milwaukee area have been flat for awhile, which has also discouraged apartment developments in recent years, Monnat said.
"It’s still a tough market because construction costs are so high," he said. "Rents have to go higher to support new construction. Because our occupancy (rate for apartments) is so high right now we can make this project work. When occupancy drops back to a normal level, hopefully rents will have come up."