Milwaukee to Kenosha I-94 corridor is red hot for industrial development

Industrial real estate development along the I-94 corridor remains hot in Kenosha County, and real estate professionals and government officials say more development is in the works for that area.

“We know more is coming,” said Jeff Labahn, city of Kenosha director of community development. “People are looking at properties, they’re asking questions. I’m anticipating we’re going to see some more things.”

And now, industrial real estate development pressure is also pushing north into Racine County and southern Milwaukee County.

MEIJER DISTRIBUTION Meijer Inc. is expanding the former Supervalu distribution center, located on the east side of Highway 31 between state Highways 50 and 165 in Pleasant Prairie, from 580,000 square feet to 800,000 square feet. The facility is expected to be operational this summer.

Plans for three speculative industrial developments in Racine County have been announced within the last two months:

  • Rosemont, Ill.-based Land and Lakes Development Company plans to develop a 60-acre business park southeast of Highway 20 and International Drive in Mt. Pleasant. The property could support up to 800,000 square feet of industrial space development.

“When we evaluated the market in Racine County for a new business park, we were amazed at how low the vacancy rate was for industrial buildings,” said Marty Hanley, president of Land and Lakes Development.

Racine County has a 4.5 percent industrial space vacancy rate, according to the latest Xceligent report. By comparison, southeastern Wisconsin has a 6.1 percent vacancy rate.

“We believe Racine County and the I-94 corridor will continue to be a magnet for business expansion and recruitment projects,” Manley said.

  • City of Industry, Calif.-based Majestic Realty Co. plans to develop a 57-acre business park on the south side of County Highway K, east of Highway V and about two miles east of I-94 in Caledonia. The business park has the potential for 750,000 square feet of development. Construction is expected to begin in spring on the first of three buildings planned in the business park.
  • Caledonia-based Jon Hendersen Real Estate Inc. plans to build a 37,000-square-foot speculative industrial building in a 36-acre business park that it is developing southwest of I-94 and 6 ½ Mile Road in the Town of Raymond in Racine County. The business park will also have a 30,000-square-foot building for Southport Heating, Plumbing & Geothermal and a 40,000-square-foot building for Hitters Baseball Academy.

Meanwhile, in southern Milwaukee County, Milwaukee-based Wispark LLC is working on plans to develop the 220-acre OakView Business Park in Oak Creek. The first tenant will be Stella & Chewy’s LLC, a producer of natural pet food for dogs and cats, which plans to move from Milwaukee to a new 160,000-square-foot industrial building in the development, according to sources.

Also, Malvern, Pa.-based Liberty Property Trust, a real estate investment trust, recently announced plans to build a 172,000-square-foot speculative industrial building in the Liberty Corporate Preserve business park, located northeast of South 27th Street and West Oakwood Road in Oak Creek.

The southern portion of Milwaukee County, including Oak Creek and Franklin along I-94, has an industrial space vacancy rate of 8.4 percent, according to Xceligent.

But Kenosha County remains the industrial real estate development powerhouse of the I-94 corridor between Milwaukee and Chicago. Kenosha County has a 3.9 percent industrial space vacancy rate and absorbed 1.66 million square feet of space last year, according to Xceligent.

The latest project coming together there is a 348-acre industrial park planned by Chicago-based Bridge Development Partners LLC southwest of I-94 and Highway 142/S. The owners of eight properties that comprise the 348 acres recently asked the City of Kenosha to annex the land from the Town of Paris into the city.

The site is on the west side of I-94 opposite of where two massive distribution centers will be built for New York-based private equity firm KTR Capital Partners is building a 1.1-million-square-foot distribution center and also plans to build a 500,000-square-foot distribution center on a site northeast of I-94 and 38th Street in Kenosha for Seattle-based Total Amazon employment in Kenosha could reach 1,575 at the two facilities. Amazon hopes to have both buildings completed by the end of this year.

The addition of has put Kenosha on the map in the distribution real estate world, some industry observers say.

“It brings at least a sense of legitimacy to this whole area,” Hanley said.

“Where Amazon goes, other companies tend to follow,” said Adam Matson, an industrial real estate broker with Milwaukee-based NAI MLG Commercial.

Other industrial development brewing in Kenosha County includes:

  • Milwaukee-based Zilber Property Group plans to build a 176,000-square-foot speculative industrial building near Highway 31 and 95th Street in LakeView Corporate Park in Pleasant Prairie.
  • Kenall Manufacturing Co., a commercial lighting manufacturer, will move its corporate headquarters and manufacturing operations from Gurnee, Ill. to a new 354,000-square-foot building that it will build southwest of Highway 158 and 104th Avenue in Kenosha. The company’s move will bring 400 employees to Kenosha.
  • Grand Rapids, Mich.-based Meijer Inc. is expanding the former Supervalu distribution center, located on the east side of Highway 31 between state Highways 50 and 165 in Pleasant Prairie, from 580,000 square feet to 800,000 square feet. The facility is expected to be operational this summer and will serve Meijer stores in Wisconsin, Illinois, and perhaps other states. Meijer plans to open several stores in southeastern Wisconsin.
  • Ontario, Calif.-based Niagara Bottling LLC plans to build a $56 million, 377,000-square-foot facility in in the LakeView Corporate Park in Pleasant Prairie. The project is expected to create about 40 jobs in the first phase.

Real estate professionals say that the I-94 corridor in Kenosha County, Racine County and southern Milwaukee County is increasingly seen as part of the Chicago real estate market in the eyes of the national commercial real estate industry.

“(In the eyes of national investors) we’re not our own market anymore, we’re part of Chicago,” Matson said.

“Proximity to a global city in Chicago is an attraction for the national investors, it’s a driver,” said Jeff Hoffman, vice president of Pewaukee-based Judson & Associates.

The I-94 corridor between Milwaukee and Kenosha is seen as a secondary distribution hub in the national real estate world. But the area is attractive to developers and investors because land costs in Racine and Kenosha Counties are much lower and the supply of land available for development is much higher than in the Chicago area.

“In Wisconsin with bigger land pieces, we can develop (an industrial) park,” Hanley said. In Illinois, his firm has been doing infill projects of late because of a lack of sites that are feasible for new industrial park development, he said.

“(The I-94 corridor north of the state line has) large blocks of land available that is reasonably priced compared to the Chicago area and even when compared to Waukesha County, which is a very mature marketplace,” Hoffman said.

City of Kenosha officials say they see no slowdown in development plans in the I-94 corridor.

“There’s quite a bit of interest (in Kenosha County from developers),” said Kenosha Mayor Keith Bosman. “There’s continued interest here and in Pleasant Prairie. It’s a good place to be right now.”

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