The landmark cobalt blue, 14-story office building on West Wisconsin Avenue, formerly known as the Henry S. Reuss Federal Plaza, has been sold to an investment group based in New York.
An affiliate of Time Equities, Inc. purchased the 578,000-square-foot downtown office complex at 310 W. Wisconsin Ave. from Philadelphia-based RAIT Reuss Federal Plaza LLC for $19.5 million.
The building is the third largest multi-tenant office complex in the state, behind the U.S. Bank tower and 411 E. Wisconsin Ave. buildings in downtown Milwaukee.
The building is currently just over 50 percent occupied with tenants including Captel, Previant Law, the General Services Administration, ESPN Wisconsin 540 AM, and the Capital Grille.
Occupancy is expected to fall to the mid-30 percent range as Bon-Ton consolidates its employees in the downtown Boston Store building and another large tenant is planning to downsize, said Tom Shepherd, who represented the seller and brokered the transaction with Dan Wroblewski of Colliers International | Wisconsin.
The buyer is planning to reinvest millions of dollars in the property by replacing 15 elevators, upgrading all of the common areas and adding to the tenant amenities package, Shepherd said.
“In the near term it will remain office with commercial on the first floor,” Shepherd said. “There is an opportunity with all of the vitality in Westown to fill the ground floor vacancies. And the building is definitely in a position for redevelopment.”
Brad Gordon, director of acquisitions at Time Equities, grew up in Milwaukee and said he is excited to return to the city to purchase the office building.
“Through an investment of over $10 million in common building upgrades and amenities Time Equities intends to reposition this building into a first class office environment and contribute to the exciting transformation of Westown into a 24/7 work and entertainment district,” Gordon said. “We feel the timing is perfect to accomplish this and intend to be a member of the Milwaukee business community indefinitely.”
The property has an assessed value of about $28.3 million, according to city records.
The building was built in 1984 and features two office towers connected by an atrium. The property sale also includes an attached 606 stall parking deck. It is connected via the skyway system to Boston Store, The Shops of Grand Avenue, the Wisconsin Center, the Hyatt, and SpringHill Suites by Marriott hotel.
Shepherd said the property was the most active investment sale listing the Colliers team had in 2017.
“The buyer that was awarded the transaction is excited to be part of the revitalization of Westown,” Shepherd said. “There is strong investor interest and real estate momentum in the neighborhood. Due to the increased foot traffic from recent entertainment, multi-family, and hotel developments Westown is just starting to realize its potential as an 18 hour market.”
