A large portion of the Caterpillar Inc. campus in South Milwaukee was sold Tuesday to Reich Brothers Holdings LLC for $13.5 million.
[caption id="attachment_322953" align="alignright" width="387"] The Caterpillar campus in South Milwaukee. (Photo by Colliers International Wisconsin)[/caption]
The White Plains, New York-based firm told BizTimes in June that it planned to acquire the 32.5-acre southern portion of the industrial campus from Great Neck, New York-based One Liberty Properties Inc. The eight-building campus at 1022 and 1100 Milwaukee Ave. totals 750,300 square feet.
“Reich brothers specializes in the purchase of intact manufacturing facilities and specifically industrial campuses, so this checked all the boxes in terms of our investment criteria,” said Michael Reich, co-director of business development and acquisitions at Reich Brothers. “We typically buy distressed properties in former campuses and our goal typically, especially in this situation, is to revitalize the campus and bring new life to the downtown South Milwaukee area.”
The campus is split in two by Rawson Avenue, with the pieces referred to as “north of Rawson” and “south of Rawson.” Caterpillar still owns two properties “north of Rawson,” a 36.6-acre parcel at 1118 Rawson Ave. and a 2.2-acre parcel at 1100 Rawson Ave. that contains an office building and many of the original Bucyrus International Inc. buildings.
In January, Caterpillar notified its South Milwaukee employees that it would consolidate all operations to the north of Rawson at Caterpillar-owned property by the end of 2018.
Tom Shepherd of Colliers International | Wisconsin, one of the brokers in the transaction, confirmed today that Caterpillar plans to vacate the south of Rawson properties included in Tuesday’s sale by the end of the year.
Colliers initially had the south of Rawson site listed for $15 million, but once Caterpillar indicated its intent to vacate the campus, the price was lowered to $13.5 million, Shepherd said.
“We did have another, a different buyer out of New York, under contract in the fall of 2017 and through due diligence of that deal, we flushed out that the tenant would probably be vacating the campus,” Shepherd said.
The Caterpillar campus once employed 10 percent of South Milwaukee’s population when it was home to mining equipment manufacturer Bucyrus.
Caterpillar acquired Bucyrus in 2011, and over the years has moved employees out of the heart of the city.
Of the 76 acres that Caterpillar occupies, the company still owns approximately 43.5 acres.
Reich Brothers plans to keep the property it has acquired as an industrial campus, and took on the Caterpillar lease, which expires in 2022, for the remainder of the company’s stay, Reich said. He declined to comment on potential future tenants.
“At this point, Caterpillar is still on campus so until they vacate the premises, they’re our tenant,” Reich said. “We’re not really on the market for other tenants at this time.”
Shepherd said Colliers was glad to have found a buyer that has demonstrated its commitment and reliability. Reich Brothers also owns part of the former Oscar Mayer complex in Madison and the former Joy Global Inc. Orchard Street plant in West Milwaukee.
“We’re pretty happy that we’re able to maintain that value with a good buyer and another out-of-state investor strongly interested in Wisconsin,” he said.
Tom Shepherd, Jennifer Huber-Bullock, Steve Sewart and Sal Strehlow of Colliers International | Wisconsin represented the seller in the transaction and Samuel M. Dickman Jr. and Samuel D. Dickman of The Dickman Co. Inc. represented the buyer.