Baker Tilly Virchow Krause LLP has narrowed its relocation options for its Milwaukee office to two proposed downtown developments, one planned by Milwaukee-based Weas Development and the other planned by a partnership of Wauwatosa-based Irgens Development Partners LLC and Joel Lee, president of Milwaukee-based Van Buren Management Inc.
In addition, a prominent Milwaukee commercial real estate source said Milwaukee law firm Von Briesen & Roper S.C., which is also in the market for a new downtown office location, has narrowed its options to two sites and is eager to relocate from its current location at 411 E. Wisconsin Ave.
Baker Tilly, an accounting and advisory firm, could decide to keep its Milwaukee office in the Honey Creek Corporate Center at 115 S. 84th St., on Milwaukee’s west side. Its lease there expires in December of 2012. However, Kevin Heppner, regional managing partner in Wisconsin for Baker Tilly Virchow Krause, said the firm is “leaning toward” moving to a new downtown building.
“We are still very strongly considering the move downtown,” Heppner said. “As of now, we are not committed to any project.”
Baker Tilly has hired Steve Palec of CB Richard Ellis to help it determine which office location is the best option for the firm, Heppner said.
The firm plans to make a decision within the next 4 to 6 weeks, he said.
The Weas site is located southeast of North Broadway and East Michigan Street. It would be about 15 to 20 stories tall, including parking, Heppner said.
The Irgens/Lee site is located southeast of Mason Street and Jefferson Street, across the street from the Pfister Hotel. It would be about 20 to 25 stories tall, including parking, Heppner said.
Both sites are currently occupied primarily by surface parking lots.
Baker Tilly has more than 200 employees in its Milwaukee office and is seeking 60,000 to 65,000 square feet of space for the office, Heppner said.
The company wants a site with good access and parking for employees, Heppner said. A site near the freeway with signage for the company is desirable, but a lack of those attributes would not be a “deal-breaker” he said.
The capital markets for commercial real estate are extremely tight right now and many lenders are reluctant to provide financing for commercial real estate developments. Any project will need to obtain a significant amount of pre-leased space and the developer will have to provide a significant amount of equity to get financing for a major commercial development, industry experts say.
Therefore, the proposed office building developments in downtown Milwaukee will probably need at least two anchor tenants to obtain financing, according to several commercial real estate sources.
Baker Tilly could be one anchor tenant for a downtown office development.
Milwaukee law firm Godfrey & Kahn S.C. plans to eventually relocate its headquarters. Commercial real estate sources indicate the firm plans to move to the Irgens project, if it comes together.
“If Irgens can put a building together we would be very attracted to that,” Rick Bliss, managing partner of Godfrey & Kahn, said in May.
Godfrey & Kahn’s headquarters is currently located in the M&I Bank corporate headquarters building at 780 N. Water St. The firm is out of room to expand there and has indicated for years that it will eventually need to move to a new building. The firm needs about 90,000 square feet of space.
Von Briesen & Roper is seeking about 75,000 square feet of office space. The law firm’s president and chief executive officer, Randall Crocker recently indicated that the firm, currently located at 411 E. Wisconsin Ave., will likely relocate.
A major reason that Von Briesen plans to relocate is that it is in the same building as one of its competitors, Quarles & Brady, which has a large sign on top of the building. One commercial real estate source said that Von Briesen would be willing to share a building with Godfrey & Kahn, as long as there is no Godfrey & Kahn sign on the building.
If that is true it is possible that the Irgens/Lee project could attract three anchor tenants: Baker Tilly, Von Briesen and Godfrey & Kahn.
Crocker has said that Von Briesen plans to make a decision by the end of the third quarter, which is in about 6 weeks.
