Seeing a rebounding downtown office market, Kenosha-based Bear Real Estate Group is planning to keep more than half of Johnson Controls’ former downtown campus as office space. Bear purchased the 430,000-square-foot seven-building campus at 507 E. Michigan St. in 2021 for $24 million and, last month, Johnson Controls officially vacated the property. Now, Bear and
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Conceptual rendering from Rinka[/caption]
Office brokers with Founders 3 say the building will be a unique option for tenants downtown, where the amount of class A contiguous office space is limited.
"There's going to be some big leases rolling over in the next two to three years, so we're looking to start talking to those tenants," said John Davis, a broker with Founders 3. "We do think we've got an advantage because we're the only block that is this large in the downtown market, which could be appealing to larger users."
"It's the same old story where the quality properties are attracting all the tenants, especially downtown, and we think this building's got a very unique story that will help sell it," said Ned Purtell, principal at Founders 3.
The entire campus is being rebranded as The Patent Block in a nod to the numerous patents Johnson Controls secured there over more than 120 years. The oldest building on the campus was built in 1902.
"What's really important to us is to keep that heritage of those buildings in our design," Mills said.
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Image from Bear Real Estate Group[/caption]
Founders 3 is actively looking for office tenants and Mills said the intention is to move forward with the residential component while the office portion of the campus fills up.
Mills said that Bear is not ready to announce detailed plans for the residential portion of the project and said that all price points (including market rate, workforce and affordable units) are possibilities.
"(The residential portion of the campus) does present some challenges, because it's basically a big rectangle and there's not a lot of windows in there," Mills said. "It has some unique attributes to it, so we're working through those details, but we're confident we'll figure out a good solution."
Although Bear is confident in the downtown office market, the firm could convert more of the block to residential if the offices don't lease up, according to Mills.
"We've looked at all of the different asset classes to see what we think will be the best fit from office, hospitality, retail of some sort, multifamily and we're confident in the plan we've come up with," Mills said.
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The campus' courtyard. Image from Bear Real Estate Group[/caption]