Milwaukee is a city known for beer, motorcycles, basketball and blue-collar workers. However, Milwaukee should also be known for having a strong retail marketplace as well. With ever-changing markets and trends, retailers are finding many ways to get creative and adapt with the trends. Due to the adaptation, the competition for prime outlots is at an all-time high and does not appear to be changing any time soon. Outlot wars It’s with absolute certainly that the Milwaukee retail market has seen a massive influx for prime outlots. So much so that the phrase “outlot wars” is regularly used when describing retail outlot developments and redevelopments. In an already saturated segment of retail real estate, we have seen many new concepts/categories pushing to secure premium outlot sites in the market. Quick-service restaurants (QSRs) and fast-casual restaurants, auto and financial institutions are the biggest participants to date. Since the beginning of the COVID pandemic in 2020, we have seen a pretty significant shift in the food category from QSR and fast-casual concepts alike. Milwaukee has seen many existing concepts continue to expand or reposition within a market, but we have also seen new concepts making a push to enter the market as …
Market Reports
By William Mears, Coldwell Banker Commercial McGuire Mears & Associates What a difference a decade makes. While some may characterize the evolution of the development and investment climate of the Janesville-Beloit, Wisconsin metropolitan statistical area (MSA) with a population of 160,120 as an extreme makeover, others will note the area has been South Central Wisconsin’s best kept secret. Case in point: the numbers speak for themselves, and local real estate and economic development officials are bullish on this location’s growth trajectory. For starters, the area’s logistical friendly environment, its value-add real estate and workforce assets and its seasoned development team provide the right ingredients to facilitate development opportunities. Since 2010, the Janesville-Beloit MSA has added more than 12 million square feet of commercial and industrial space. Recognized brands such as Amazon, Kerry Foods, Fairbanks Morse Defense, SHINE Medical Technologies and Prent Corp. represent a sampling of the area’s business community. These companies and their 3,500+ counterparts drive the area’s annual GDP figure, which is nearly $7 billion. Industrial and warehousing demands from end-users seeking to leverage critical supply chain inputs are continually impacting the county’s real estate market. As a result, industrial vacancy rates are hovering around 2 percent, and …
By Andrew Jensen Jr., Cushman & Wakefield | Boerke Milwaukee was once known as a city of industries and beer, the hometown of Allen-Bradley (now Rockwell Automation), Briggs & Stratton, Harley-Davidson, Johnson Controls, Master Lock, Rexnord and, of course, the Miller, Pabst and Schlitz brewing juggernauts. Today, Milwaukee’s economy is more diversified, and its industrial companies are quieter and not as flashy. But the area’s industrial firms are still central to its success and are now driving the area’s office market. In and near Milwaukee’s central business district (CBD), major recent office deals, all involving industrial users, include: ● Milwaukee Tool, based in the suburb of Brookfield, will soon expand into Milwaukee with a $30 million redevelopment of a vacant five-story, 333,000-square-foot office building. Milwaukee Tool will employ up to 2,000 people there, the largest-ever influx of jobs to the CBD by a suburban-based firm. The City of Milwaukee is providing up to $20 million in financing for the project. ● Utilities and infrastructure contractor Michels Corp., based in the small Wisconsin town of Brownsville, chose a riverfront development site 60 miles away in Milwaukee for an office expansion after considering Chicago and New York City. The $100 million project, …
By Ray Balfanz, Outlook Management Group What does Milwaukee bring to mind? Beer? Cheese? TV’s “Happy Days?” Perhaps the city chosen as the site for the 2020 Democratic National Convention? Yes, that’s us — being recognized and happy about it. But since I began penning this piece in March, we’ve experienced a world of change in the realities of group gatherings: we can hardly have 10 people in a group now, let alone thousands of delegates filling our new Fiserv Forum. It’s anybody’s guess how long the multi-trillion-dollar brick-and-mortar retail industry will be effectively shuttered and how the industry will have changed when it’s over. So without a crystal ball, I’m sharing Milwaukee’s story of how our retail developments have kept relevant for our consumers, while hoping for the best possible outcome once we’re on the other side of this coronavirus pandemic. “A great place on a great lake” our tourism slogan once proclaimed — and indeed it is. Milwaukee is a largely undiscovered gem with excellent quality of life and endless spots at which to spend your hard-earned cash: a prolific culinary scene, first-rate arts offerings and vibrant retail. From the reimagined Drexel Town Square, to redeveloped Bayshore, to …
The southeastern Wisconsin industrial real estate market had a banner year in 2019 and remains strong. According to Catalyst, the industrial market in southeastern Wisconsin had a vacancy rate of approximately 4 percent at the end of 2019 and that rate has moved down slightly to 3.9 percent during the first quarter of 2020. This rate is well below the historical vacancy rate in southeastern Wisconsin, which averages between 7 and 9 percent. Several submarkets are significantly lower than the southeastern Wisconsin average: Racine, where the massive Foxconn project is underway, has a 3.8 percent vacancy rate; the large Waukesha submarket, which has nearly 83 million square feet of inventory, has a vacancy rate of 1.9 percent; and the Sheboygan submarket, which has about 27 million square feet of industrial space, has an astonishing 0.1 percent vacancy rate. These extraordinarily low vacancy rates suggest that demand for industrial space in southeastern Wisconsin remains very robust and that, particularly in certain submarkets, supply has not been able to keep up with demand. While lease rates have remained fairly steady throughout the last year, upward pressure on such rates continues to build. Nevertheless, there are some signs of the market taking a …
Milwaukee has experienced development at an unbelievable rate, and within the past couple of years there has truly been a downtown renaissance worth bearing witness. The city has done an excellent job of creating value, attracting jobs and spurring development that has led to unprecedented economic and social revitalization. With both local and national headlines praising Foxconn, Amazon, Northwestern Mutual and the Milwaukee Bucks, it is no wonder things have changed. While Milwaukee continues its quest to establish itself as the Great Lakes capital, the changes happening to its culture are what appear to have everyone on their feet. Between the East Side, downtown, Historic Third Ward, Walker’s Point and Bay View, there are so many cool concepts coming online, each of which showcases the unique character of the area it serves. From the Bucks Entertainment District to Zocalo food truck park (Phelan Development), there is something different in just about every corner. It comes as no surprise much of the action is coming from the food and beverage segment, as Milwaukee is after all “Brew City.” One of these concepts is Crossroads Collective. Crossroads is the brainchild of developer Tim Gohkman with New Land Enterprises. The food hall took …
Milwaukee, a city known for beer, motorcycles and baseball, is currently in a position of shifting from what was once perceived as the normal retail marketplace into the new age of retail. This type of retail is ever-changing and has a deeper focus on experiential activities and artisanal food. These two words, “experiential” and “artisanal,” are frequently being used to describe where the retail landscape is heading. Online competitors, as well as changing consumer preferences, are driving out the traditional department store models and forcing retailers to adapt to this way of life or suffer struggling sales and inevitable store closures. Adaptive reuse The story of traditional retail being dead due to online retailers’ entrances into different market segments continues to invade publications throughout the country. While there may be some truth to that for certain retailers such as Toys ‘R’ Us, Babies ‘R’ Us, Shopko, Bon-Ton and Payless ShoeSource, an argument can be made that it was also their inability to adapt in the marketplace that led to their demise. These store closures affected numerous markets throughout the country and Milwaukee was no different in seeing several of these retailers close multiple locations across the metro area, leaving landlords …
It is widely acknowledged among commercial real estate professionals in the Milwaukee market that we are in the midst of a renaissance of sorts — certainly the most exciting period in the past few decades to be actively involved in the industry. From the Harbor District to the Deer District (the newly branded area around Fiserv Forum), new neighborhoods and exciting destinations are sprouting up. This resurgence continues to attract residents and developers who are quickly creating the critical mass necessary to make Milwaukee a viable 18-hour city. On the multifamily front, new supply that has come online in the past few years is driving both average rental rates and overall vacancy higher. As of the first quarter of 2019, the average rental rate in the metro Milwaukee market increased 0.8 percent from the previous quarter to $1,075, continuing an upward trend that saw a 2.2 percent annual increase at year-end 2018, according to real estate data provider CoStar. The vacancy rate hovered around 5.9 percent during this same period, slightly higher than the year-end 2018 level of 5.6 percent, but lower than the recent high of 6.1 percent established in 2017. The average rental rate in the first quarter …
When it comes to location identification for development, you have to think creatively. In a highly competitive market like Milwaukee, mixed-use projects offer a great opportunity to showcase creativity, take advantage of complementary uses and drive tremendous value for clients and investors. The success of a mixed-use project lies in location. A high-profile location will help attract businesses, which then helps build traffic. Ideally, you want to think outside the box to generate repeat visits with businesses that will help sustain that traffic. An innovative mix of retail, restaurant, hospitality, office and even healthcare can greatly enhance a development. Mixed-use retail developments create new opportunities for healthcare projects. Health systems and physician practices are choosing to prioritize locations they may not have previously considered. There’s been a significant expansion of and increased focus on the outpatient ambulatory environment. The trend of developing specialty outpatient facilities, ambulatory surgery centers and micro-hospitals continues to gain momentum and allows for expansion to remain competitive while maintaining efficiency. An outpatient facility brings traffic. Finding a high-visibility location where customers are already engaging increases the convenience factor. Built-in traffic drivers like restaurants and retail help with trip assurance. For example, after wrapping up a clinic …
Healthcare properties present a tremendous opportunity for real estate developers in the Milwaukee market and the upper Midwest. The national and regional healthcare real estate sectors remain on solid footing, according to the 2018 Healthcare Marketplace Report from Colliers International. The sector remains attractive in terms of both stability and diversification. There will always be a demand for healthcare services as the U.S. population continues to age at an unprecedented rate. A growing number of Milwaukee-based health systems have announced plans to expand in bids to gain or maintain market share. The merger of Aurora Healthcare with Advocate Health Care Network to create a single health system known as Advocate Aurora Health is a recent example. There’s been a significant expansion of and increased focus on the outpatient ambulatory environment. Health systems face significant capital expenditures in order to maintain aging hospitals. Alternative developments such as specialty outpatient facilities and micro hospitals have gained momentum and allow for expansion to remain competitive while efficient. With the emerging trend toward population health management, hospitals and health systems take on the financial risk of providing care for a certain population across a certain geography. Having to take on the additional risk of …