Economic Trends: Office, hospitality projects to headline busy 2020 for Milwaukee-area real estate market

The BMO Tower in downtown Milwaukee is slated to open this spring.
The BMO Tower in downtown Milwaukee is slated to open this spring.

Brownsville-based utility and infrastructure contractor Michels Corp. began construction of the R1VER project last year in Milwaukee’s Harbor District, and 2020 is shaping up to be another big year for the development.

The first phase of the project includes a 210,000-square-foot office building and a parking structure that will hold about 1,050 vehicles. Structrual steel is currently being erected on the office building. The work is slated to finish in the fourth quarter.

Michels will occupy three floors of the building. David Stegeman, Michels’ chief legal officer and senior vice president of mergers and acquisitions and real estate, said the company is having “active discussions” with several prospective corporate tenants for the remaining office space.

As part of additional phases of the R1VER project, Michels will build an apartment building with retail space, a 90-room hotel and possibly another 120,000-square-foot office building, depending on market demand.

Construction of the apartments and hotel will begin this year, and the second office building could start going up this year or next year, said Stegeman.

The company has also entered into a franchise agreement with a “prominent national hotel franchise,” and is in talks with restaurant proprietors for the retail space. He said the hotel and restaurant operators will be announced in the first half of the year.

R1VER, along with Komatsu Mining Corp.’s proposed manufacturing and office campus, promises to dramatically transform the Harbor District.

“It goes without saying, the Harbor District is completely red hot,” Stegeman said.

Komatsu is aiming to start construction this spring, a spokeswoman said in December. The $285 million campus will be built south of Greenfield Avenue and east of First Street, along the Kinnickinnic River.

Construction continues on the Michels Corp. R1VER project in Milwaukee’s Harbor District.
Construction continues on the Michels Corp. R1VER project in Milwaukee’s Harbor District.

Office projects

R1VER is just one of a number of office-related projects to watch in 2020.

The Huron Building at 511 N. Broadway in downtown Milwaukee has made notable progress since its spring 2019 groundbreaking.

Just up the street, at 790 N. Water St., is the BMO Tower. That project was slated for completion in December, but a water-supply breach pushed that date back by several months. Mark Irgens, chief executive and manager of Milwaukee-based Irgens Partners LLC, said the building should open in April or May.

Irgens also has plans to redevelop the existing building where BMO has offices and its retail bank branch, at 770 N. Water St. After initially considering a number of uses, such as a hotel, Irgens said his firm has decided on 770 North remaining as an office building with a first-floor space that likely will be occupied by a restaurant.

There’s plenty of activity happening across the river, as well, in downtown Milwaukee’s Westown neighborhood.

Milwaukee-based engineering firm GRAEF-USA Inc. recently moved into its new offices at The Avenue. Located at 275 W. Wisconsin Ave., the former Grand Avenue mall is being transformed into a mixed-use center consisting of apartments, a first-floor food hall and office space on the top two levels.

Renovation work also continues on 310W, the former Henry S. Reuss Federal Plaza at 310 W. Wisconsin Ave. The building’s owner, New York-based Time Equities Inc., last summer detailed its $30 million renovation plans for the mostly empty office complex. A spokeswoman said that in 2020, the building will unveil tenant amenities such as a fitness center and a mezzanine-level café, and will open its new tenant lounge and co-working facility by the summer.

Hotels, convention centers

As Wisconsin prepares to host the Democratic National Convention and the Ryder Cup, a number of developments are underway that will add hotel rooms and convention space to the Milwaukee area for future events.

The planned expansion of the Wisconsin Center in downtown Milwaukee promises to take big steps this year. The Wisconsin Center District, which owns and operates the facility, recently named the design team for the expansion project. By March, WCD should have a cost estimate on the project. Groundbreaking is slated for spring 2021.

In Oak Creek, the city is working with Wisconsin Dells-based Stand Rock Hospitality to develop two hotels totaling up to 221 rooms and an 11,500-square-foot conference and event center on land just south of the Ikea furniture store. City officials approved a development agreement for the $30 million project, and a public hearing is scheduled for late January on proposed municipal code amendments that would allow the development to occur.

Back downtown, construction of a two-building, three-hotel project near the southwest corner of Michigan and Jefferson streets is slated to finish sometime in the second half of the year. Coralville, Iowa-based Hawkeye Hotels and Bloomington, Minnesota-based JR Hospitality are developing the hotels, which will add 331 rooms to the market. A spokeswoman said the roofs of both buildings will soon be finished, followed by exterior finishes and interior work, such as installation of mechanical, electrical and plumbing.

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Alex Zank
Alex Zank covers commercial and residential real estate for BizTimes. Alex previously worked for Farm Equipment magazine and also covered statewide construction news at The Daily Reporter. He graduated from the University of Wisconsin-Eau Claire, where he studied journalism, political science and economics. Having grown up in rural western Wisconsin, Alex loves all things outdoors, including camping, hiking, four-wheeling and hunting.