Representatives for Swedish furniture retailer Ikea announced recently that the company plans to build a 295,000-square-foot store in Oak Creek. It will be the first location for Ikea in Wisconsin.
The store will be the anchor of a mixed-use development planned by Milwaukee-based Northwestern Mutual Life Insurance Co., on land the company owns northwest of I-94 and Drexel Avenue in Oak Creek, across South 27th Street from the company’s Franklin campus.
The single-story Ikea store will be built on 29 acres and will also have 1,200 parking spaces. Ikea plans to purchase the land from Northwestern Mutual Life Insurance Co.
Construction work for the store is expected to begin in the spring of 2017, and the store is expected to open in the summer of 2018. The construction project will create 500 jobs, said Liz Gabor, Ikea’s real estate manager.
Once complete, the store will employ 250 people.
Ikea officials said the retailer has about 206,000 customers in the Milwaukee area who travel to shop at the two stores in the Chicago area. Ikea has stores in Schaumburg, Ill. and Bolingbrook, Ill. The Schaumburg store, which is closest to Milwaukee, is the largest in the U.S. at 450,000 square feet.
Ikea currently has 41 stores and sales of $4.6 billion in the United States. According to its website, Ikea is hoping to increase its presence in the Midwest.
The company will open its second store in Ohio next year and its first store in Indiana. Ikea recently began construction of a 1.25-million-square-foot distribution center in Joliet, Ill. to support its Midwest expansion plans.
The Oak Creek Ikea site is part of 128 acres of land along Drexel Avenue in Oak Creek owned by Northwestern Mutual. In November, the city changed its land use plan so 60 of those acres could be developed.
Betsy Hoylman, spokesperson for Northwestern Mutual, said as of right now, there are no specific plans for the remaining acreage, but the company is excited for the potential development prospects Ikea could bring.
“The Ikea brand name is attractive to business, such as restaurants or other retailers that want to be located nearby,” Holyman said. “We are excited by this development and look forward to discussions with interested parties that see the location’s potential.”
The development will be done through Northwestern Mutual Real Estate, the company’s real estate arm, which is one of the largest investors in real estate in the country. Northwestern Mutual Real Estate has a $41 billion real estate investment portfolio, with investments in commercial mortgages and equity investments across all major property types, including apartments, office, retail and industrial.
Ikea approached Northwestern Mutual in 2015 about building a store on the site.
“We are known for chasing opportunities, but they came to us and said this is what we have for you,” said Oak Creek Mayor Steve Scaffidi. “As you can imagine, we were really excited.”
