In the post-pandemic office market in which high-end space is in high demand, but new buildings are hard to come by, the supply of contiguous class A office space in downtown Milwaukee is filling up. New downtown Milwaukee buildings like 833 East and BMO Tower, and recently renovated buildings like the ASQ Center and HUB640,
In the post-pandemic office market in which high-end space is in high demand, but new buildings are hard to come by, the supply of contiguous class A office space in downtown Milwaukee is filling up.
New downtown Milwaukee buildings like 833 East and BMO Tower, and recently renovated buildings like the ASQ Center and HUB640, have seen a flurry of new tenants in the last couple of years, leaving few options for tenants still in the market looking for class A space in Milwaukee.
But about two miles south of downtown Milwaukee is the 200,000-square-foot R1VER building (said like "River 1") at 210 W. Becher St. Built in 2020, the building has struggled to attract tenants amid a softened office market. But with downtown's class A supply tightening and a new broker representing the building, momentum could be building.
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R1VER was developed by Michels Corp. affiliate Becher Development LLC. Michels occupies the top three floors of the development’s eight-story office building, with Denmark-based transport and logistics company DSV occupying about 5,000 square feet on the second floorand Milwaukee-based financial planning firm Beauchamp Maleki Group (BMG) building out its new 6,000-square-foot space on the first floor, which also has a sprawling tenant/reception lounge that spills into the building’s lower floor, offering direct access to the city’s RiverWalk and boat slips for tenants.
In total, the building is about 35% vacant and has nearly 100,000 square feet of contiguous space, the most among any of the class A office buildings in or around downtown Milwaukee.
"There is a limited amount of larger blocks of contiguous space (available in the market), so I think R1VER is uniquely positioned right now because we're one of the only buildings that can accommodate these larger users," said Matt Hunter, founder and CEO of Hunter Real Estate.
After working as an office broker for other firms for more than 20 years, Hunter launched Hunter Real Estate earlier this year and became the listing broker for R1VER.
"Since I was just going off on my own, I didn't have a bunch of other products that I was listing," Hunter said. "I could give this building a lot of my time and energy."
Hunter was most recently executive vice president for JLL’s Milwaukee office. His career began in 2003 at the Polacheck Company, which was acquired by CBRE in 2006, and he later joined Inland Companies, which became affiliated with Colliers International.
Hunter is hoping to be more intentional about marketing the opportunity the R1VER building offers for a potential headquarters due to the amount of contiguous space in the building and the opportunity for signage.
"I don't think the market realizes that they could either put their name up with Michels, or Michels would take their name down and rebrand the building for another large tenant or headquarters," Hunter said. "Larger tenants, really anyone over 50,000 square feet, is at least considering having their name on their building. They want that exposure and there's a status symbol that comes with it."
[caption id="attachment_601209" align="aligncenter" width="1920"] A vacant floor of the R1VER office building in the Harbor District.[/caption]
For all of its amenities and available space, however, some area brokers said the building's location is the issue most tenants have to overcome.
"It's not quite downtown, but not quite suburban," one office broker said. "But it does have an impressive amenity package that a lot of tenants are looking for."
"I think the building came on the market at an unfortunate time, but we've seen the downtown office market come back pretty strongly to the point that a lot of the new, highly-amenitized space has been occupied," another office broker said. "That could accrue to R1VER's benefit."
One way Hunter hopes to combat location concerns is by offering free parking, which is expected at most suburban office properties but not downtown properties, Hunter said.
"I think it's just outside of some people's comfort zones and they don't realize we're only a few minutes from downtown still," Hunter said. "Traditional downtown tenants, or suburban tenants looking to come downtown, are most comfortable east of the river. We've seen that target location expand to west of the river and down into Walker's Point, so I think we're at a point where tenants could start looking farther."
Securing BMG as a tenant on the first floor, as well as a yet-to-be-named tenant also eyeing space on the first floor, could provide much needed leasing momentum for the building, Hunter said.
R1VER could see some new downtown competition in the coming years, though. Kenosha-based Bear Development recently unveiled plans to update about 250,000 square feet of Johnson Controls' former downtown headquarters and lease it out as office space with an updated amenity package. Similarly, Madison-based Neutral is planning about 190,000 square feet of office space at their mixed-use development at the Marcus Performing Arts Center parking structure and Chicago-based North Wells Capital is planning about 200,000 square feet of office space in Deer District, though details have not been released for either of those proposals.
