Millennial Workforce Drives Development Wave in Downtown Milwaukee
There’s never been a better time to live and work in downtown Milwaukee. With the recession in the rearview mirror, a massive resurgence in the multifamily and office sectors has originated in Wisconsin’s largest city. Since 2011, 2,500 multifamily units have been completed, with an additional 1,500 units under construction and 2,000 proposed.
The office market has seen a similar trend with nearly 2 million square feet of new development being created, the bulk of which is Northwestern Mutual Life Insurance Co.’s new $450 million, 32-story office tower.
After decades of decline, downtown Milwaukee is experiencing a surge in population growth largely attributed to the development influx. This has changed the makeup of the city’s job market and molded a new workforce hinged on modern factors. With an increase in residents migrating to urban areas to work and reside, companies are shifting gears to tap into this ever-evolving talent market.
Catering to millennials
Known as the job-hopping generation, millennials are the focus of companies’ recruiting tactics. Combined with competitive compensation packages, businesses have begun leveraging their chief incentive: the physical office space.
A prime example of this development, the Third/Fifth Ward on the city’s southeastern side has become one of Milwaukee’s premier office districts for downtown and suburban users. While not every company’s culture fits a downtown address with exposed ductwork, cream city brick and wooden timbers, forward-thinking companies such as OnCourse Learning and Pentair are utilizing finishes like these in their suburban office settings.
In an effort to foster creativity, spur growth and ultimately attract talent, companies look to the Third/Fifth Ward as the gold standard in the Milwaukee office market.
Interior design aside, the real estate mantra, “location, location, location” holds true in today’s commercial sector. While firms such as Monster.com, Bader Rutter and Empower Retirement are taking advantage of the economic growth by moving from their suburban office locations to downtown, a move of this scale is not always practical.
Companies in Milwaukee are finding themselves navigating the dichotomy this trend has created. Executives want to relocate to settings more attractive to millennials while remaining close enough to their existing locations to accommodate more tenured employees who reside in the suburban areas. Coupled with an increased commute time, the scarcity in downtown parking forces executives to find a solution for senior staff.
Sprucing up the suburbs
Meanwhile, suburban landlords are capitalizing on this issue. Ownership organizations such as the BROE Group at One and Two Riverwood in Waukesha are looking for creative ways to attract these types of users. Landlords are providing unique solutions such as hiring food trucks on a weekly basis to give their tenants access to alternative dining options that downtown employees enjoy.
Irgens has taken note as well and has incorporated a common area fitness center into its Meadowlands project to create the work-life balance that so many corporations aim to capture.
Added amenities and continued advances in technology have shrunk the amount of physical space companies need. While the total occupancy cost may stay the same, executives are starting to spend more on their square footage as they look to update their image, enhance their culture and establish a modern workplace.
Will the trend of companies relocating from the suburbs to downtown continue? Absolutely. But the suburbs pose a serious threat in the competition for tenancy as landlords and cities reinvest in their infrastructure.
The effects of Milwaukee’s economic boom can be felt far beyond the streets just west of Lake Michigan.
— By Ben Anderson, Associate Broker, Colliers International Wisconsin, and Paige Pichler, Real Estate Management Services, Colliers International Wisconsin. This article first appeared in the July 2017 issue of Heartland Real Estate Business magazine.