Real Estate: Third Ward holds up well during recession

Milwaukee’s Historic Third Ward, one of the city’s hottest neighborhoods during the real estate boom, is still attracting new development, despite the long and painful recession that has brought development to a halt in most areas.

In the Third Ward two new apartment buildings are under construction, the Milwaukee Institute of Art and Design (MIAD) is reviewing proposals for a new residence hall, new office tenants have moved in, a vacant industrial building was redeveloped into an office and retail building and a historic building was converted into condominiums, all within the last year.

And while several stores have closed in the Third Ward during the last year and a half, a reflection of the national retail slump caused by the recession, several other stores are moving into the neighborhood.

“We feel things in the Third Ward are going extremely well,” said Third Ward developer Robert Joseph. “We are still going strong.”

Joseph is building an 81-unit, five-story apartment building called Jackson Square at the northwest corner of East Menomonee and North Jackson streets. The building will also have about 9,000 square feet of retail space.

The other apartment building under construction in the Third Ward is a six-story, 76-unit building called Corcoran Lofts that Mandel Group Inc. is building on the north side of East Corcoran Avenue, adjacent to Mandel’s Gaslight Lofts development. The building will also have 3,400 square feet of retail space.

Combined, the Jackson Square and the Corcoran Lofts apartment buildings will add another 157 residential units to the Third Ward. Those projects are two of the few real estate developments that have been able to obtain financing during the recession and the banking industry meltdown.

“The reason we’ve been able to get our deal financed is because the (apartment) rental rates in the Third Ward are some of the highest in the city because it is an extremely desirable area to live in,” said Mandel Group chief operating officer Robert Monnat. However construction financing is even harder to obtain now, he said.

Although residential condominium development has almost completely stopped since the national real estate housing market collapse, one condo development was completed last fall in the Third Ward, Cityside Plaza, a 57-unit condominium redevelopment of an historic building at 239 E Chicago St., which was done by Chicago-based Magnet Group. So far, 19 of the units, which are priced between $225,000 and $490,000 and have 1,100 to 1,700 square feet of space, have been sold.

“The Third Ward is a unique neighborhood,” said Yiannis Konstantinou, president of Magnet Group. “It’s like a Soho or Lincoln Park in Milwaukee. It’s a very nice, safe area.”

Another Third Ward residential development is being planned by the Milwaukee Institute of Art & Design, which is considering four development proposals for a new, 250-student residence hall. Three of the sites are in the Third Ward and the fourth is just south of the neighborhood. The Third Ward sites are at 256 E. Menomonee St., 233 E. Chicago St. and in the 500 block of East Erie Street. The proposal for the first two sites call for seven to eight-story structures built on top of existing buildings. The third site would be for a new building. The fourth site that MIAD is considering, is in the South Water Works redevelopment project, being built by Lighthouse Development Company LLC, just south of the Third Ward.

In addition to the neighborhood’s rising residential population, more office tenants have moved into the Third Ward recently including Cramer-Krasselt and Boelter + Lincoln. Both moved from downtown locations. The office space in the Third Ward used to be dominated by architects and other creative businesses but now is attracting all types of businesses said Monnat of Mandel Group, which also has its headquarters in the neighborhood.

“You have law firms, investment houses, all sorts of people are here now because of the quality of the neighborhood,” he said. “They like being down here.”

Joseph, who owns several residential and commercial buildings in the Third Ward, added a fourth floor of office space to an historic building at 301 N. Broadway where an Anthropologie store occupies 10,500 square feet of space on the first floor. The building’s new fourth floor is now occupied by Digital Measures, which moved there in April. Joseph is renovating the second and third floors into office space.

“(Office tenants are attracted to the Third Ward) primarily because it’s pedestrian, particularly Broadway, which is a very pedestrian-friendly street,” Joseph said. “There aren’t a lot of areas in the city that are pedestrian friendly and have a lot of retail. This (neighborhood) does.”

Several stores in the Third Ward have closed during the recession including Urban Accents, Verlo Mattress Factory, HERS, Three Graces, Divna and J. Bird Boutique. However, other stores are moving in to take their place. Stores and restaurants that have opened within the last year, or will open soon, in the Third Ward include Retique, 190 N. Broadway; Lorena Sarbu, 312 E. Buffalo St., Embelezar, 241 N. Broadway; Good Harvest Market, 346 N. Broadway; Quality Candy/Buddy Squirrel, 215 ½ N. Water St.; Javino, 303 E. Menomonee St.; Taco de Bago, 241 N. Broadway and The Melting Pot, 341 N. Milwaukee St.

Retique is an upscale version of a Goodwill store. The store sells high end name brand second hand and vintage clothing items. The store has been open for a few weeks and its sales per square foot are 43 percent higher than a traditional Goodwill store, said Cheryl Lightholder, spokeswoman for Goodwill Industries of Southeastern Wisconsin.

“That location is exactly what we were looking for,” she said. “The Third Ward is a very trendy area with a strong sense of community. I was there (on a recent) Saturday and it was very busy, still. We’re very happy, very pleased (with the sales).”

Lorena Sarbu, the owner of the store that bears her name, said each store in the neighborhood helps attract shoppers to the Third Ward, which benefits all of the retailers there. Anthropologie, a national chain, in particular provides a draw for the neighborhood that benefits the other stores.

“Anthropologie (located across the street from Lorena Sarbu) is not my competitor, they have a different look,” Sarbu said. “But they’re an established brand. The young customer that goes to Anthropologie is coming across the street to my store.” 

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