Milwaukee Metro Commercial Real Estate Appraisals

Milwaukee Metro’s Commercial Real Estate Market

Overview

The Southeastern Wisconsin commercial real estate market is constantly evolving.  Recently, the suburban areas are seeing an influx of industrial use properties, and especially in Racine County, where the area has been experiencing "The Foxconn Effect."  Additionally, as in most US cities, people and businesses are moving back into the city core.  New company headquarters have been announced in the City of Milwaukee, such as Foxconn, Komatsu, Michels, and Rexnord Corp.  At the same time, many retailers are closing stores in the area, including JCPenny and Boston Store.

Industrial Market

The Milwaukee Metro industrial market is experiencing high occupancy and low vacancy rates.  The current Metro area vacancy rates is between 3.5% and 4.0%. As with most metro areas in the United States, the Milwaukee area is experiencing the "Amazon Effect," which has had a positive influence in industrial properties, as storage, distribution, and warehouse facilities are in increased demand as a result.  Additionally, trucking companies in the area have benefited from e-commerce, and some are in the process of building new facilities along the I-94 corridor.

Self-Storage Market

Self-storage around the US and throughout Wisconsin has seen a surge in development in recent years.   Cap rates in the US and Wisconsin had been decreasing the past few years; however, have remained stagnant and may even increase going-forward, spurred by increases in interest rates and supply.

Hotel/Hospitality Market

Hotels Under Construction

1. A three-brand (Home2 Suites, Tru, and Holiday Inn Express), two-building, 328-room hotel development currently under construction located at the southeast corner of E. Michigan St and N. Jefferson St. in downtown Milwaukee.  JR Hospitality (based in Minnesota)  is the developer.
   

Proposed Hotel Developments

1. The Ikon Hotel (formerly the Milwaukee Mall), proposed by Milwaukee Developer Haywood Group.  This project is proposed to contain 82 rooms, retail storefronts and co-working space. 
2. Catalyst Partners proposed a 107-room, four-story Holiday Inn Express hotel for the site located at 10201 W Lincoln Ave, Milwaukee.  The site has visibility from Interstate 41.
3. Cobalt Partners proposed a $10.7 million 125-room Home2 Suites by Hilton hotel at the mixed-use redevelopment of the former Allis-Chalmers office building.

Recent Hotel Sales

1. Holiday Inn & Suites Milwaukee Airport Hotel (built in 2000) sold on July 13, 2018 for $8,400,000. 
2. The Hyatt Regency Milwaukee (built in 1979) sold on July 6, 2018 for $37,300,000.
3. Crowne Plaza in Wauwatosa (built in 2000) sold on May 3, 2018 for $24,500,000.

Office Market

Recently-Completed Office Buildings

1. The Huron Building - a Class A office building located in downtown Milwaukee that was developed by J. Jeffers & Co.  The total development cost is estimated to have been $59 million and construction was completed in circa 2020.
2. Komatsu Mining Corp. - a $285 million office headquarters on a former Solvay Coke gas property in Milwaukee's Harbor District.  The development plan includes 170,000 square feet of office space and 410,000 square feet of manufacturing space.
3. R1ver - an eight-story mixed-use office development located in Milwaukee's Harbor District.  River 1 is part of the first phase of the campus.  Once fully built out, the campus is proposed to contain office space, multi-family housing, retail, a 103-room hotel, and nearly 1,000 underground parking spaces.
   

Proposed Office Buildings

1. New Land Enterprises proposed a seven-story 42,000 square foot office building a riverfront site located at 834 N. Plankinton Ave in Milwaukee.

Recent Office Building Sales

1. Metro Center - a 350,000+ square foot office building locate at 1126 South 70th Street, West Allis, WI.  The listing broker was Prowess Real Estate.
2. 15460 W. Capitol Drive, Brookfield, WI recently sold.  The listing broker was Prowess Real Estate.

Other Milwaukee Area Proposed Developments

1. $300 million expansion of the the Wisconsin Center in Downtown Milwaukee.  Ground-breaking is expected to be at the end of 2020 or early 2021.
2. Brady & Water - a 12-story, mixed-use condominium project, proposed by local Milwaukee developer Wangard Partners, Inc.  The development plan calls for a mix of retail, apartments, and condo units.

Recent Milwaukee Area Redevelopments

1. The Avenue - a redevelopment of the former Grand Avenue Mall.  This mixed-use project contains a food hall, office space, and apartments.
2. $70 million renovation of the historic Milwaukee Athletic Club (MAC).  The renovation included a new rooftop terrace, retail and dining options, state-of-the art fitness facilities, and modern hotel and event space.