Last updated on May 15th, 2019 at 04:50 pm
Mandel Group is working to secure financing for its proposed high-rise apartment tower, Portfolio, with plans to break ground on the 20-story project, planned for Milwaukee’s Lower East Side, in the third quarter of 2019.
The Milwaukee-based developer has reconfigured the plans for the $100 million project, reducing the number of apartments from 235 to 176. The reduction is not a result of the market – the demand is there, said Phillip Aiello, senior vice president of development of Mandel Group, but rather financing.
“It is more challenging to get a high-rise in Milwaukee financed,” Aiello said. “High-rise developments have to be large to support the construction. And the larger the development, the higher the cost and the more equity you have to raise.”
Mandel Group is planning to pay for Portfolio with a conventional mortgage and private equity. Like Mandel’s recent projects, it will target empty nesters who can afford larger luxury apartments.
While the project will include one, two and three-bedroom units, most of the building will have the larger units, Aiello said.
Mandel Group first announced the Portfolio project in 2016. Once complete, Portfolio will finalize the East Pointe mixed-use development Mandel Group started in 1988. Mandel has owned the 1-acre site for the Portfolio at 1350 N. Prospect Ave. since 1990.
Portfolio is one of five residential towers that are planned or have recently been completed in the Milwaukee area.
In August, Northwestern Mutual opened Milwaukee’s first new apartment tower in six years, 7Seventy7. The $100 million 35-story luxury apartment building at 777 N. Van Buren St. was 56 percent leased as of Wednesday.
Three other apartment towers are also being planned:
- The Couture, a 44-story luxury apartment tower at 909 E. Michigan St., would have 322 high-end apartments. The project also includes 50,000 square feet of restaurant and retail space, a transit hub and more than 900 parking spaces. Developer Barrett Lo Visionary Development LLC is awaiting approval of a loan to guarantee from the U.S. Department of Housing and Urban Development in order to secure financing to begin construction.
- The Goll Mansion, a 28-story, 192-unit apartment tower at 1550 N. Prospect Ave. Developers for the $55 million project pulled a construction permit in January and told BizTimes that financing had been secured but so far, construction has not begun. Madison-based developer Chris Houden, with Palisade Properties Management LLC, could not be reached for comment.
- OneNorth, a $200 million project along I-43 in Bayside that includes a 30-story apartment tower with 280 apartments. Developer Cobalt is asking the village for $42.6 million in public financing to help pay for the project.
Aiello said Portfolio carves out a niche that is slightly different than the other high rise projects. He said he will also be interested to see if all of the other projects pan out.
“I still need to understand the Bayside tower a little better and plan to go to the public hearing to understand the market,” he said, adding that if there is a competitor to Portfolio, it will likely be the Bayside project.
“Some people want a highly amenitized community, but some will want to be downtown,” he said. “That is our competitive distinction. There will be self-selection.”