When James Young joined Milwaukee’s JLL office earlier this year to lead the firm’s industrial team, one of the first things brokers in the Chicago office asked him about was the I-43 corridor.
For the past decade, momentum has grown along the I-94 north-south corridor, with several companies from Illinois moving north of the state line and bringing hundreds of jobs with them.
What brokers and developers are beginning to discover is the I-43 corridor from New Berlin to Janesville could offer employers the same benefits.
“There is a lot of land, the communities have good workforces and the corridor is set up great for trucking,” Young said. “So what is one more freeway interchange down the road?”
Milwaukee-based Zilber Property Group has been bullish on the I-43 corridor for some time. In late March, the company bought out its partner, the Luterbach family, to acquire full ownership of the Towne Corporate Park in New Berlin in a $29.2 million deal.
The six-building business park, at I-43 and South Moorland Road, totals 430,000 square feet and is fully occupied.
In fall 2017, Zilber purchased the former John Deere distribution center in Janesville. The 489,000-square-foot industrial building sits on 61 acres and can be expanded to 1.1 million square feet, said Michael Kleber, director of leasing for Zilber.
“We have bookends with the New Berlin park and 61 acres in Janesville,” Kleber said.
Since the purchase, Zilber has prepared the building to be re-leased. Zilber is planning two 150,000-square-foot industrial buildings adjacent to the former distribution center. Depending on leasing, those buildings could be constructed in late 2018 or 2019, Kleber said.
The site, at 2900 Beloit Ave., is located 76 miles from Milwaukee, 40 miles from Madison and 109 miles from Chicago. In addition to its proximity to I-43, it is also located along the I-39 corridor, which is where Dollar General constructed a 1 million-square-foot distribution center in 2017.
“Once I started looking down there, I was pleasantly surprised,” Kleber said. “There were so many well-known corporate flags outside of office buildings. This is a border city, there is great freeway connectivity and Rock County has an engaged economic development director.”
Jeff Hoffman, a partner with Cushman & Wakefield | The Boerke Co. in Milwaukee, said the I-43/39 corridor in southeastern Wisconsin has differentiated itself from the metro Milwaukee marketplace by being able to deliver 20-plus-acre industrial parcels that have all utilities and entitlements in place at a fraction of the cost of locating in the Milwaukee/Chicago area.
One example he pointed to was the City of Janesville’s Community Development Authority advertising one of its business parks for $35,000 per acre for fully improved industrial land with immediate access to I-39. A comparable site in Kenosha County would be going for closer to $150,000 per acre, Hoffman said.
“I am curious as to how the people/wage dynamic will hold up in this corridor,” Hoffman said. “The total labor force available within a 30-mile radius of Beloit is estimated to be 520,000 people, compared to Kenosha, which has access to a 1.77 million-person labor force within a 30-mile radius.”
Another area of interest along the I-43 corridor has been Mukwonago. The village has been working with Greenfield-based Anderson Commercial Group LLC for more than two years to market key sites for retailers and manufacturers, while at the same time marketing itself as a business-friendly community.
A large parcel known as the Sugden property was sold to the village in late March for $3.3 million. It will be used for a business park at I-43 and Highway 83.
C.I. Banker Wire & Iron Works Inc. will jump start the park with a 190,000-square-foot facility there later this year.
“Everyone is chasing employees and where populations are growing is where employers will want to be,” Kleber said. “Mukwonago is a growing area.”
In Elkhorn, New Berlin-based plastic container manufacturer Schoeneck Containers Inc. is planning a large industrial building.
Schoeneck Containers has filed documents with the state saying it plans to build a 250,777-square-foot industrial building on about 38 acres at the interchange of I-43 and Highway 67.
“If the market continues to be this strong, companies will have to go further out to get the product they want,” Young said. “It’s really only an extra few minutes to go from Mukwonago to the airport versus Pewaukee to the airport, so this is very viable long term – as long as the market stays healthy.”