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The Couture, at 44 stories and 322 apartments, is only one of several planned luxury multi-family residential towers around downtown Milwaukee.
In fact, there are 876 luxury high-rise housing units either under construction or going through the local approval processes. More are in the works but aren’t actively seeking approvals.
Some may wonder: Can Milwaukee’s downtown apartment market support that many new units?
“Overall, Milwaukee’s multi-family market has just been really impressive throughout the (COVID-19) pandemic,” said Gard Pecor, senior market analyst with CoStar Group Inc. “Vacancies remain low, and we’ve seen demand remaining pretty consistent.”
That’s good news for the plethora of apartment projects in the works in Milwaukee. Other than The Couture, other luxury high-rises include Ascent, a 25-story, 259-unit mass timber structure under construction at 700 E. Kilbourn Ave. Another is a 32-story, 295-unit apartment tower proposed for 333 N. Water St. in the Historic Third Ward.
Pecor said the vacancy rate for multi-family units across metro Milwaukee is 4.3%, “far and away the lowest in the Midwest. It’s one of the top ten lowest (vacancy) markets across the country.”
There’s also evidence that Milwaukee could use more luxury multi-family units, specifically.
CoStar Group has its own star-rating system to judge properties across markets. Five stars reflects top quality in terms of design, amenities and finishes. Whereas a Class A office space in Milwaukee differs from Class A in Chicago or Indianapolis, five-star properties are similar in every metro area, he said.
While there are a few five-star apartment properties in metro Milwaukee, the only true five-star property downtown is Northwestern Mutual’s 7Seventy7 building.
“In terms of quality, and really compared to some of the other five-star properties we have in the market, it’s on a different level,” Pecor said.
7Seventy7’s rental rate, when considering unit size, is higher than any other rental community in the market, he said. It comes out to $2.97 per square foot; that’s 20% higher than the next property up. Pecor said Ascent will take over at second place when it opens, at $2.66 per square foot. CoStar didn’t have enough information to calculate The Couture’s rate.
7Seventy7’s strong performance has paved the way for others like it downtown. Pecor said the building reached stabilization within two or three quarters and has maintained strong occupancy even throughout the COVID-19 pandemic, at around 95%. Pecor said luxury apartment properties in some other markets saw an exodus of renters during the pandemic.
7Seventy7’s success gave developers an example to point to when pitching their own projects.
“It really opened the door for some of these newer developments,” Pecor said. “I don’t know if The Couture breaks ground today, if we don’t have 7Seventy7 as an existing sample of luxury development in the city.”
It was indeed part of The Couture developer Barrett Lo Visionary Development’s pitch to prospective investors.
“I have to tip my hat to the guys at Northwestern Mutual with the 7Seventy7 project and their ability to show proof of concept,” said Rick Barrett, founder and chief executive officer of Barrett Lo. “I think us coming behind them, I’m thankful to them, because they’ve been wildly successful, and they’ve been able to fill that building and bring people into downtown Milwaukee.”
These luxury apartments are headline-grabbers. The Ascent has gotten global attention due to its use of mass timber. And the proposed 32-story tower in the Third Ward has the attention of local industry professionals and government officials because it’s being pitched by a national developer. Houston-based Hines is the firm behind the $140 million project.
Even though the Hines project will compete with The Couture for renters, Barrett supported the development. He said it’s a testament to The Couture, 7Seventy7 and other projects that are raising the city’s profile.
“We welcome Hines coming to town,” Barrett said. “I’m very excited about the future of Milwaukee, and I’m excited about the way that Hines has come in and said they want to invest their Houston money in the Milwaukee market. God bless them.”
Other potential high-rises include the Housing Authority of the City of Milwaukee’s 32-story Convent Hill South. It’s planned for the corner of Knapp and Milwaukee streets and would contain 350 market-rate and affordable units.
There’s also the long-planned 20-story Portfolio apartments on Milwaukee’s Lower East Side. Original plans called for 24 stories and 235 units but shrank to 176. It could get even smaller. A December 2019 filing by project developer Mandel Group Inc. suggested the building could end up being a mid-rise of seven to 12 stories instead. Mandel Group did not respond to a request for a project update.
Another East Side apartment tower project, for a 27-story, 192-unit building at the Goll Mansion site on Prospect Avenue, appears stalled. It secured approvals in 2017 but it hasn’t moved forward and the property was listed for sale last year.