With major commercial real estate developments under construction throughout the Milwaukee area, regional interest in the high-profile and decidedly visible industry is at its peak.
And with so much attention and activity, a lot of people have strong opinions about all of the development going on. That can lead to some frequent misconceptions about the marketplace.
[caption id="attachment_154873" align="alignnone" width="770"] Jackson Street Holdings has proposed a mixed-use development with three hotels at the vacant site at Fourth Street and Wisconsin Avenue.[/caption]
Some of the most prominent Milwaukee-area commercial real estate professionals will debunk many of the oft-repeated myths about southeastern Wisconsin’s commercial real estate industry at BizTimes Milwaukee’s annual Commercial Real Estate and Development Conference, to be held Thursday, Nov. 17, at Potawatomi Hotel & Casino in Milwaukee.
The panel of speakers will include: Doug Nysse, principal of Arrival Partners; James T. Barry III, president of The Barry Co.; Bill Bonifas, executive vice president of CBRE; Robert Monnat, partner with Mandel Group; and Bruce Westling, principal of NAI MLG Commercial.
Commercial Real Estate & Development Conference Panelists
[caption id="attachment_154870" align="alignnone" width="770"] Nysse, Bonifas, Barry, Monnat and Westling[/caption]
Each speaker represents a different industry sector and there is plenty to talk about, as each is extremely active in the area.
Nysse will discuss the hotel market, which has had numerous developments completed in Milwaukee this year and others that are ongoing. The 158-room Kimpton Journeyman Hotel opened earlier this year in the Historic Third Ward. Also earlier this year, a 150-room SpringHill Suites by Marriott hotel opened near the Wisconsin Center downtown. A 220-room Westin hotel is under construction downtown. Bear Development is converting the Button Block building downtown into a 94-room Homewood Suites by Hilton hotel. Drury Southwest Inc. recently purchased the First Financial Centre office building downtown and may convert it into a 200-room hotel. A Hyatt Place hotel is planned at The Brewery complex downtown. Nysse is part of a group that has proposed a $279 million mixed-use development, including three hotels with a total of 506 rooms, at North Fourth Street and West Wisconsin Avenue downtown.
The surge in development activity makes some wonder if the city’s hotel market is getting overbuilt. The older hotels in the city will be hit the hardest if the market reaches oversaturation, said Greg Hanis, president of New Berlin-based Hospitality Marketers International Inc.
Monnat will discuss the apartment market, which is probably the most active commercial real estate development sector in the region. Numerous apartment developments have been constructed in the region in recent years and several others are planned or under construction. The most prominent apartment project is the 302-unit, 44-story Couture project, which Barrett Lo Visionary Development plans to build downtown at the lakefront. Mandel Group is working on several apartment projects in the suburbs and near downtown, including the 132-unit DoMUS development in the Third Ward and the fourth phase of the North End project on the East Side, just north of downtown. Mandel Group also is working on a 24-story apartment tower project at North Prospect and East Odgen avenues on the East Side, which is expected to break ground in 2017.
Like the hotel market, some wonder if the apartment development surge in the area is creating an oversupply for that market. In an annual survey by BizTimes Milwaukee of members of the Commercial Association of Realtors Wisconsin, CARW members were asked which real estate sector was most in danger of being overbuilt. Of those surveyed, 70.6 percent said the apartment market.
Westling will talk about the retail real estate market. There is currently more than 2.1 million square feet of retail space under construction in the region, including work at The Corners of Brookfield, 84South in Greenfield and Drexel Town Square in Oak Creek, according to Xceligent. Also in Oak Creek, IKEA plans to build a 295,000-square-foot store along I-94.
Bonifas will discuss the office market. This also has been an active market, with numerous suburban office tenants moving, or making plans to move, to downtown Milwaukee. Tenants that will move downtown include marketing and public relations firm Bader Rutter, which will move from Brookfield to the Wangard Partners redevelopment of the downtown Laacke & Joys property, and Hammes Co., which also will move from Brookfield, to a five-story office building it plans to build downtown. In addition, Irgens earlier this year completed construction of a new 17-story, 358,000-square-foot office building at 833 E. Michigan St. downtown, and Northwestern Mutual Life Insurance Co. is building a new 32-story office tower at its downtown corporate headquarters campus.
Barry will discuss the industrial market, which statistical data shows is the strongest real estate sector in the region. The region’s industrial market had a 4 percent vacancy rate in the third quarter, down from 4.9 percent a year ago. There are more than 3.1 million square feet of industrial construction projects ongoing in the region, according to Xceligent and CARW. The largest is Uline’s 800,000-square-foot distribution center, being built in Kenosha.