Virtually no new condos have been built in the city of Milwaukee since 2011, prompting some to wonder when the city’s new condo market will come back to life.
That market might finally have a pulse, as three new condo developments have started to make their way through the development pipeline over the past several weeks.
In the Historic Third Ward, Milwaukee-based Renner Architects is going through the permitting process for 13 townhome-style condos; on the Lower East Side, a new development firm called Cirrus Property Group, also based in Milwaukee, has proposed 15 townhome-style condos; and in the Riverwest neighborhood, a development led by local attorney Nola Hitchcock Cross could bring 40 condo units in a co-housing style development.
If built, the three projects would add a total of nearly 70 condo units to the city, adding much-needed supply to an increasingly competitive and unaffordable housing market.
“A condo that’s priced right in Milwaukee doesn’t last long,” said Chris Corley, a real estate broker with Corley Real Estate in Milwaukee. “In the Third Ward, they’re gone in a week, if that. Elsewhere in the city, they might last a few weeks.”
There are more than 11,000 condo units in the city of Milwaukee, representing around 4% of its total housing stock, according to the city’s 2023 housing affordability report. Most of them were built in the 1970s, when the first major condo construction boom hit the city, followed by a second boom in the 2000s.
But development of new condos dried up after the housing bubble burst during the Great Recession, when home and condo prices plummeted and banks became hesitant to lend to large condo developments, opting to instead support the thousands of apartments that have been built in Milwaukee since then.
“People want to live downtown, and there’s been a huge influx of rentals in downtown, some quote, unquote luxury buildings, which are giving buyers more options,” Corley said. “But the lack of new (condo) inventory has probably hurt demand a little bit because for people looking for something that’s new or updated, the apartment buildings can be attractive.”
[caption id="attachment_600314" align="alignnone" width="300"]
A rendering of Cirrus Property Group’s condo project proposed on the Lower East Side.
Credit: Galbraith Carnahan Architects[/caption]
Unique financing approaches
To make a condo project pencil out in 2024, some developers are finding unique ways to finance their projects.
Renner Architects, for instance, is planning to pay for its Third Ward project out of pocket without bank financing or other investors, according to Peter Renner, a lead partner at Renner Architects. The firm developed many of Milwaukee’s existing condo buildings like the Harbor Front in the Third Ward and Breakwater on the Lower East Side.
The new project is planned for a thin strip of land, at 610 E. Summerfest Place, that Renner already owns and has been planning the project since at least 2016. High construction costs have been a barrier to moving forward with the project, as well as an issue with utility connection, he said.
“We have that oddball piece of land, and I’ve been meaning to do it for years, and just I haven’t done it,” Renner said. “If we build them in a high-quality fashion, they’ll sell readily.”
Renner said he’s planning to begin work on the project, which would include two-bedroom, two-bathroom units between 1,400 and 1,800 square feet, as soon as he gets the necessary permits. He declined to share estimated sale prices.
In Riverwest, the $18 million River Trail Commons project, pitched for 2716 N. Humboldt Blvd., received initial approval from the City of Milwaukee last month and could break ground next year. The development team is continuing to secure financing for the project, which will include a traditional construction loan and equity financing through future owners making down payments on their condos. The project will also rely on donations, so far raising just over $1 million, from foundations and individuals to help subsidize some of the units, according to Hitchcock Cross.
Around half of the development’s units would be “steeply discounted” for first-time homebuyers with deed restrictions to ensure they remain affordable when resold. The discounted units would create opportunities for people of color to buy their first homes, helping reduce Milwaukee’s racial wealth gap and ensure a more diverse group of residents, said Montavius Jones, principal of Narvarte Development and a member of the development team.
Cirrus Property Group is planning to build its townhome-style project, located at 1524-26 N. Jefferson St., in phases as it sells them to help “limit risk as much as possible,” Daniel Hasbani, vice president of development, told Milwaukee’s Zoning, Neighborhoods and Development Committee.
Known as The Fifteens at Park East, the three-bedroom condos would include terraces, two-car attached garages and optional rooftop patios. They would be in five, three-unit buildings, arranged in two rows. Developers are on track to receive final city approval this month.
The sale prices have yet to be determined, Hasbani said, but the goal is to keep prices below $1 million.
Cirrus leadership said the firm was unable to comment further on the project’s financing.
