Though most feel it’s too soon to declare “the coast is clear,” it appears Milwaukee’s commercial real estate (CRE) market has weathered the pandemic and is poised for a rebound as we head into 2002 and beyond.
Milwaukee has a population of nearly 600,000 people and is home to more than 32,000 registered businesses, making it one of the most active commercial property markets in the Midwest. Its office market is also one of the most active. In Q3 ‘21, the MKE metro office market experienced positive absorption for the second straight quarter, along with increased leasing activity. Four of five suburban office submarkets also experienced positive absorption in Q3 ’21.
Downtown Milwaukee has been bustling with activity in the past few months, including Milwaukee Electric Tool’s announcement that the company is expanding its operations in downtown Milwaukee — a move that could bring up to 2,000 jobs to the city.
Other companies heading to downtown Milwaukee in the near future include Good Karma Brands — which is moving WTMJ-AM to West Wisconsin Avenue — and Kriete Group, which recently announced its new home will be downtown Milwaukee’s historic Johnson Bank building. According to the Journal Sentinel, the company is leasing the entire five-story, 17,000-square-foot building.
The $420 million expansion of downtown Milwaukee’s convention center is ramping up with a groundbreaking in October and site work already underway. The expansion will double Wisconsin Center’s space — allowing it to host two major events at the same time. Officials say annual direct is expected to increase from $105 million (2019) to $154 million during the first year, and employment will increase from 8i00 to 1200 by 2024.
Retailers’ sales and profits in the MKE metro are up substantially, even as business owners pivot to meet the changing consumer demands. These include contactless ordering, curbside pickup and an accelerated demand for convenience and online. Some retailers have adapted better than others. Kohls, for example, has embraced the store within a store concept. It has partnered with Amazon and Sephora to drive traffic and increase cross marketing opportunities. Best Buy adapted to the new world with an omni-channel delivery model that gives customers product where and when they want it — in-store, online with a store pickup, or online with home delivery.
With just a brief slowdown during the pandemic, the industrial market continues to show strong growth. According to a recent report, Milwaukee’s 2021 industrial market showed a 4.4% decrease in vacancies and a .6% increase in asking price for rents. Industrial real estate has historically been driven by manufacturing and the retail sector. That’s changing rapidly, as e-commerce and other companies have been taking up space to fulfill online customer deliveries.
Companies are also finding ways to repurpose industrial space. Hundred Acre is an urban hydroponic farm located in Milwaukee’s Century City business park. Founder Chris Corkery says Milwaukee was a good fit for his urban farm because it’s a “very navigable city.” He said Milwaukee also “has a strong, supportive community fabric” and a “rich heritage here in both agriculture and manufacturing.”
As we turn the corner on 2021, all signs indicate the CRE industry is positioned at the forefront of the expected recovery. No doubt there will be bumps in the road ahead. At the same time, there will be excellent opportunities for companies with flexible business models that can adapt swiftly to the one constant – change