The Holter Financial Group plans to move its offices this summer from the Blatz Washhouse building at 1101 N. Market St. in downtown Milwaukee to the 23rd floor of the 100 East Wisconsin building, located at 100 East Wisconsin Ave. in downtown Milwaukee.
The company will lease about 25,000 square feet of space in the 100 East Wisconsin building, according to commercial real estate sources.
Meanwhile, the 35-story 100 East Wisconsin building, the second tallest building in the city and the state, is for sale. The building is owned by Milwaukee-based Northwestern Mutual Life Insurance Co.
“Yes, (the building) is on the market,” said Northwestern Mutual spokeswoman Jean Towell. “We consider it a premier property in downtown Milwaukee.”
Northwestern Mutual does not have a specific listing price for the property, she said.
Construction of the 430,800-square-foot building was completed in 1989. It was developed by a joint venture of Northwestern Mutual and Charlotte, N.C.-based Faison Associates. Northwestern Mutual now owns 100 percent interest in the property.
New York-based Eastdil Secured LLC is marketing the property for Northwestern Mutual.
The building is about 90 percent occupied, according to Towell. That means only about 43,080 square feet of space is available in the building. The Holter Financial Group’s lease will bring the building’s occupancy level up to about 96 percent.
The building also has 754 indoor parking spaces.
It has an assessed value of $67.5 million, or $156.68 per square foot, according to city of Milwaukee records.
The commercial real estate industry has been battered by the Great Recession. Nevertheless, Northwestern Mutual thinks it is a good time to sell the 100 East Wisconsin building because of its prime location at the northwest corner of Wisconsin Avenue and Water Street along the Milwaukee River in the heart of downtown Milwaukee’s central business district, and because of its high occupancy rate, Towell said.
“It has several top flight tenants with long term leases,” she said.
The tenants in the building include: Michael Best & Friedrich, which leases 112,684 square feet of space; Wells Fargo Bank, 44,670 square feet; Marcus Corp., 41,219 square feet; Cleary Gull Holdings Inc., 23,540 square feet; and PricewaterhouseCoopers LLP, 22,894 square feet. John Hawks Pub is also located in the building.
Northwestern Mutual briefly put the building up for sale in 2007, but then took it off the market as the economy, particularly for commercial real estate, went into decline, Towell said. Now that the economy is improving the company believes it is the right time to try again to sell the building, she said.
The occupancy rate for class A buildings in downtown Milwaukee, including the 100 East building, is fairly low according to commercial real estate sources. Various estimates peg the downtown Milwaukee class A office space vacancy rate at 8.5 percent to 13 percent.
The capital markets for commercial real estate are currently extremely tight, a byproduct of the Great Recession. That makes it difficult for developers to build new office buildings that could compete with existing class A buildings downtown, such as the 100 East Wisconsin building. Several developers are working on office building projects in downtown Milwaukee, but they will have to prelease about 75 percent of the office space to obtain financing to break ground, according to commercial real estate sources.
“100 East Wisconsin’s average occupancy since 2004 is over 92 percent,” Eastdil says in marketing material for the building. “This is indicative of the property’s irreplaceable CBD location and ability to continually attract and retain tenants. Furthermore, the six buildings that directly compete with 100 East Wisconsin are currently 92 percent leased. The high occupancy levels attained at 100 East Wisconsin and the competitive buildings in the market are a further testament to the stability and longevity of the property.”
For more information about the sale of the property click here.
