Northwestern Mutual Life Insurance Company Inc. announced Wednesday it plans to purchase a 153,720-square-foot office building at 733 N. Van Buren St. in downtown Milwaukee. The company has entered into a contract to purchase the building, but the deal has not closed yet.
The sale price was not disclosed. The building has an assessed value of $4.5 million, according to city of Milwaukee records.
The building is located across the street from NML’s corporate headquarters.
This fall the company announced that it plans to tear down a 16-story, 451,964-square-foot office building on its downtown Milwaukee campus. The company said the building, which houses 1,100 employees, is safe but has significant ongoing maintenance needs.
NML has indicated that it will replace the building with a new building downtown, a new building at its Franklin campus or a combination of the two. The company has met with city of Milwaukee and Franklin officials about its plans.
Some downtown Milwaukee supporters are worried that the company will decide to build in Franklin to take advantage of lower costs there. The loss of about 1,100 Northwestern Mutual employees would be a blow to downtown.
If the company decides to build a new building downtown on the same site as the building that it plans to tear down, it would have to find a place to temporarily house those employees. Otherwise the company could build a new building in Franklin and move the employees there once it is complete.
The purchase of the 733 N. Van Buren Street building gives NML the flexibility to house the employees from the building that will be demolished and while replacing it with a new building, if that is what it decides to do. The company said it could house 1,000 employees in the Van Buren Street building and its other buildings downtown. The remaining 100 employees could be moved to the Franklin campus.
“For now this transaction simply provides the space we need so that we can get people situated and work can continue uninterrupted during the demolition process,” said Tim Gerend, vice president and leader of NML’s long range campus planning effort. “We are a long way from knowing where buildings and people will ultimately be located. We’re looking forward to creating modern, efficient and flexible space that can support our business and employees for decades to come. We are at the start of a very exciting process to create a 21st century work environment that will allow us to better serve our policyowners and financial representatives.”
Some downtown commercial real estate executives say that NML’s purchase of the 733 N. Van Buren Street building is a good sign that the company will decide to build its new building downtown.
“I don’t think they were ever planning on leaving downtown,” one commercial Realtor said. “I don’t think the Franklin thing is real.”
“I think they are further along (with plans for the new building) than they let on,” a construction industry executive said. “I think that piece of property (where NML’s downtown headquarters sits) is so amazing they would be stupid to not put something on it.”
However, Joel Lee, the owner of Van Buren Building Company, which is selling the 733 N. Van Buren St. building to Northwestern Mutual, said he doubts the company has made up its mind about where to build a new building, and says people shouldn’t read too much into the company’s plans to purchase the building.
“I don’t think anybody can surmise anything,” Lee said.
Northwestern Mutual has been a major tenant in the building for years, moving employees in and out when overflow space is needed, Lee said.
NML planned to make significant use of the building as it replaces the downtown building, so it made more sense to just sell the building to them, he said. Constant moving activity in the building would be detrimental to other tenants, Lee said.
After it builds its new building NML could still use the 733 N. Van Buren St. building to accommodate future growth, the Realtor said.
Lee said he has no idea what NML will decide to do but, “they are committed to the city of Milwaukee. They’ve told that to me a dozen times in meetings.”
Andrew Weiland is managing editor of BizTimes Milwaukee.