The relocation of the Manpower Inc. corporate headquarters from Glendale to downtown Milwaukee will be the biggest commercial real estate development in southeastern Wisconsin during the second half of 2007.
Manpower’s move will provide a significant boost to downtown Milwaukee and the Park East corridor and it will leave behind a sizeable void in Glendale.
The 280,000-square-foot, four-story office building for Manpower is under construction just west of the Milwaukee River, just south of Cherry Street and east of North Dr. Martin Luther King Jr. Drive. The building is being developed by Gary Grunau and Scott Sampson. The construction project is expected to be complete in time for Manpower employees to move in from Sept. 7-16.
“At last report everything is on schedule,” said Manpower spokesman Paul Holley. “We are very excited about it.”
The company will have about 900 employees at its new corporate headquarters, most will come from Glendale and about 100 will come from Brookfield. The company has said it may add up to 300 more employees at the headquarters over the next five years, which would bring total employment there to 1,200.
Those employees will provide more potential customers for downtown area restaurants, bars and stores. Some Manpower employees are planning to move to the downtown area because of the corporate headquarters move. In addition, visitors to Manpower’s headquarters will help fill downtown hotel rooms.
The Manpower headquarters should also provide a boost to the King Drive business district, which has had a net gain of 25 businesses since 2005, including several that have opened since the Manpower move was announced.
“It’s huge for the district,” said Teig Whaley-Smith, executive director of the King Drive Business Improvement District. “We certainly expect a bigger lunch crowd and more people at coffee shops and retail stores. It’s not your typical corporation. They have people that want to get out and be in the community.”
The move downtown also means Manpower will be vacating a large amount of office space at its current headquarters in Glendale, where the company owns two buildings and leases space in a third building. The company is selling its 81,000-square-foot building at 5301 N. Ironwood Road and its 31,000-square-foot building at 5235 N. Ironwood Road. Steve Palec of CB Richard Ellis is the listing agent. Manpower will also vacate 125,000 square feet of space that it leases at 5055 N. Lydell Ave.
“We’ve had a lot of interest (in Manpower’s Glendale buildings),” Palec said. The 16.5-acre Manpower property in Glendale is at a highly visible location along the west side of I-43, just south of Silver Spring Drive. The site may be attractive to retailers that want to be near Bayshore Town Center. It might be difficult to fill all of the space with office tenants, considering the weakness of the Milwaukee area office market and the fact that Bayshore still has vacant office space.
Manpower’s move could also hurt Glendale hotels on the Port Washington Road corridor, said hotel industry consultant Greg Hanis, president of Pewaukee-based Hospitality Marketers International Inc.
“Manpower was a big demand generator (for Glendale hotels),” Hanis said. “The loss of that I think is going to impact a lot of the hotels on Port (Washington) Road.”
The new Manpower corporate headquarters could help spur development in the Park East corridor, which is just to the south and is largely vacant but is quietly coming to life.
The Park East corridor should actually be a fairly busy area during the second half of this year. Including the Manpower project, there are $400 million in developments currently under construction in and around the Park East corridor. Mandel Group Inc. recently began demolition of the former Pfister & Vogel tannery site, where it plans to build several buildings with 88 apartments, 395 condominiums and 30,000 square feet of retail space. Zilber Ltd. founder Joseph Zilber is redeveloping the former Pabst brewery into a new, mixed-use urban neighborhood. Fort Myers, Fla.-based Development Opportunity Corp. is building a 14-story building at the southeast corner of Water Street and Juneau Avenue, which will be complete next year and will include a 121-room Staybridge Suites hotel, 31 condominiums and 14,000 square feet of retail space. Deerfield, Ill.-based Legacy Real Estate Development LLC is building the Flatiron, which will have 38 condominiums, at 1541 N. Jefferson St.
The Flatiron project will be complete in October, Legacy principal Rod Engel said. So far 18 of the 38 condos in the building have been sold.
Other projects could begin in the Park East corridor later this year. Mequon-based Ruvin Development Inc. and Dallas-based Gatehouse Capital Corp. plan to start construction in September for a 10-story building at the northeast corner of Old World Third Street and Juneau Avenue with a 120-room Aloft hotel and the Milwaukee office of Cramer-Krasselt, which will move there from 733 N. Van Buren St. Ruvin and Gatehouse are planning a larger development for the Sydney Hih block across the street and are in negotiations with city officials about possible city assistance for the development, which would include a hotel operated by San Francisco-based Kimpton Hotels.
At the southwest corner of Old World Third Street and Juneau Avenue, developer Rick Barrett is hoping to start construction by the end of the year on The Moderne, a $73 million, 30-story building that would have a 120-room hotel and 10 floors of condominiums. The project has already attracted interest from condo buyers, even though the sales and marketing of the condos has not begun yet, Barrett said. That interest in the project could help get construction started soon.
“If everything falls into place, I can be in the ground in November,” Barrett said.
During the last 12 to 18 months a large number of hotel developments have been proposed for southeastern Wisconsin, but so far few have begun construction.
Approximately a dozen hotel developments have been proposed in and around downtown Milwaukee, but so far the Development Opportunity Corp. project, which includes a Staybridge Suites hotel, is the only one to break ground.
In addition, more than a dozen hotels have been proposed in the suburbs, but few have broken ground. A 100-room Hilton Garden Inn opened earlier this year at the Pabst Farms development in Oconomowoc and a 198-room Crowne Plaza hotel is under construction at 10499 Innovation Dr. in Wauwatosa, and is expected to be completed in February.
Hanis predicts that only three more downtown Milwaukee hotel developments will occur, and the rest of the proposals will be dropped. A 100-room hotel proposed by Dixon Development at 50 W. Florida St., in a fromer Coakley Bros. Inc. warehouse near the Harley-Davidson Museum that is under construction in the Menomonee Valley; a mixed-use development proposed by Charlotte, N.C.-based Ghazi Co. at the southwest corner of North Fourth Street and Wisconsin Avenue that would include entertainment-oriented retail space and a hotel; and one of the other proposed downtown hotels will get built, Hanis predicts.
The Dixon project will be able to take advantage of the Harley museum and the Ghazi project will likely receive city assistance because the site, across the street from the Midwest Airlines Center and next to the Shops of Grand Avenue, is of great strategic importance to downtown, he said.
The Fourth and Wisconsin site is the ideal site for a convention hotel, Hanis said. If the city allows a hotel with fewer than 300 rooms it will be a missed opportunity to attract a convention oriented hotel that would help attract more conventions to Milwaukee, he said. However, the Ghazi proposal calls for a 175-room boutique hotel. The smaller hotels tend to serve more business travelers, Hanis said.
“You really need a major hotel with 450 plus rooms at that site to make that a viable convention hotel,” he said.
Hanis said he thinks suburban hotel development will be quiet for awhile, despite the large number of proposals. The largest proposed suburban hotel is the 405-room Deer Creek Inn & Conference Center that would be built at 1401 S. Moorland Road in New Berlin. The seven-story hotel would include a water park. But Hanis said the Brookfield-New Berlin Moorland Road hotel market could not support a hotel that big.
“That thing (Deer Creek) is an albatross that will never get off the ground, in my opinion,” he said. “It would be like dropping an atomic bomb. I don’t think there would be any survivors, including it, if that thing went in. It’s just a ridiculous project.”
The Pabst Farms development at I-94 and Highway 67 in Oconomowoc could attract more hotel development over time, Hanis said.
“I could see two more hotels within five years of the retail, commercial and hospital development there taking hold,” he said.
Look for Roundy’s dominance of the southeastern Wisconsin grocery market to slip as several competitors are planning new stores.
Wal-Mart has proposed Supercenters, which include a grocery section, in Saukville, Hartford, and two in Milwaukee, one near State Fair Park and the other an expansion of the regular Wal-Mart discount store at 3355 S. 27th St. into a Supercenter store. Target has proposed a SuperTarget store, which also includes a grocery section, in Waukesha. Two Sendik’s stores are planned in Franklin, one of them is already under construction. Janesville-based Woodman’s Food Markets Inc. is building a 238,266-square-foot store at South Howell Avenue and West Forest Hill Avenue in Oak Creek, which is expected to open next year. Aldi is planning stores in Greenfield, Oconomowoc and Burlington. Costco is building a 151,000-square-foot store in Grafton, which is expected to open in August. The Costco store is part of a 392,000-square-foot retail development by Menomonee Falls-based Continental Properties Company Inc. northwest of Highway 60 and I-43 that will also include a Kohl’s store.
Target has plans for another store in Pewaukee, but that would be a regular discount store without a grocery section.
“I think (new grocery stores are being planned) because Roundy’s got a little top heavy with their market,” said David Livingston, a grocery industry consultant and managing partner of Pewaukee-based DJL Research. “They raised their prices in preparation for the sale of the company and that provided an opportunity for lower priced grocers like Wal-Mart and Aldi to come in.”
Livingston estimates that Roundy’s has about 62 percent of the Milwaukee area grocery market. The company built up its market as several grocery stores in the area have closed in recent years including Kohl’s, Jewel, Piggly Wiggly and Sentry stores. Earlier this year Jewel closed 15 stores. Three re-opened as Pick ‘n Save stores, Lena’s Food Market re-opened two of the stores, Sentry operators re-opened four of the stores and four others are still vacant.
As a result of those and other grocery store closings in recent years the Milwaukee area has become underserved by grocery stores, Livingston said, and that has attracted interest from new competitors like Wal-Mart and Target.
Some Piggly Wiggly and Sentry stores remain in the area, but many of those and other “weaker” stores could close as additional competition comes into the market, Livingston said. Store closings would help reduce Roundy’s lost marketshare to the new competitors, he said.
“I think what (Roundy’s) is going to count on is weaker stores dropping out,” Livingston said. “Some Sentry stores will probably drop out of the market. That will save Roundy’s in a way a little bit from losing as much of the market as they might have.”
Roundy’s may acquire some of the stores that close, Livingston said.
Wal-Mart, Target, Woodman’s and Costco will all probably open even more stores in the area than they already have planned, further eroding Roundy’s share of the market, Livingston said. He predicts Wal-Mart and Target each will open about 12 grocery-discount combination stores in the Milwaukee area. Woodman’s and Costco likely will each open two more locations in the area, he said.
“In a year or so we could see a nine point decline in market share for Roundy’s,” Livingston said. “That still puts them over 50 percent, which is still pretty good.”
The area might gain a few more high end grocery stores as well. Livingston said Whole Foods and Trader Joe’s each might open a second location in the area, likely in Waukesha County.
“Upscale (grocery store) demand has grown,” said Peter Glaser, vice president and retail broker for CB Richard Ellis.
The Highway 60 and I-43 interchange in Grafton remains one of the hottest areas for retail development in southeastern Wisconsin. The Costco store that is under construction will help attract even more retailers there.
“(Highway 60 and I-43) is going to become like (Highway) 83 and I-94 in Delafield,” Glaser said. “I think you will see a lot of retailers follow Costco.”
Three major retail developments are in the works in Franklin, one of the area’s fastest growing communities. Equitable Development LLC and Devo Properties LLC are building the 500,000-square-foot Fountains of Franklin development at South 51st Street and Rawson Avenue. The project is already under construction and will include a Sendik’s grocery store. Mark Carstensen Construction and Development Companies Inc. plans to build a retail development at the southeast corner of Highway 100 and Drexel Avenue that would include another Sendik’s store and a Target store. Waukesha-based MRED Cummings Real Estate Development Corp. plans to build a 225,000-square-foot retail development east of Loomis Road and Highway 100.
“I think (the Franklin developers) are a response to the residential growth,” Glaser said.
The addition of two national retailers to the east side of Milwaukee could attract more. Whole Foods opened its store at North and Farwell avenues last year and now Urban Outfitters plans to open a store later this year in the Kenilworth building at the southwest corner of Prospect Avenue and Kenilworth Place.
“That brings a lot of credibility to the area,” Glaser said. “These are the types of retailers that other (stores) follow.”
There is still a lack of sites in the metro Milwaukee area that are available for new industrial development. The I-94 corridor south of Milwaukee continues to attract build-to-suit and speculative industrial developments.
In addition, the City of Milwaukee has had some success attracting new industrial development to the revitalized Menomonee Valley. New industrial facilities under construction in the valley include a 144,000-square-foot facility being built by Ziegler/Bence that will be anchored by Proven Direct, which will move there from Menomonee Falls, and new facilities that are being built near Miller Park by Badger Railing and Caleffi Hydronics.
“I think there’s interest in (the Menomonee Valley),” said James T. Barry III, president and CEO of Colliers Barry. “But it’s limited in the amount of square footage and the type of building you can do. Because of the city’s job requirements, you can’t do a distribution center there.”
Monco Law Offices leased 1,500 square feet of office space at 601-11 N. Barker Road, Brookfield, from CPS Associates.
Nervosa Café leased 1,718 square feet of retail space at 205 E. Wisconsin Ave., Milwaukee, from 205 Wisconsin LLC.
CB Richard Ellis
Alterra Grafton LLC leased 1,752 square feet of retail space at 1211 Washington Avenue, Grafton, from Grafton Direct LLC.
Cognex Corp. leased 1,863 square feet of office space at 10150 W. National Ave., West Allis, from Westminster Lincoln LLC.
Summit Granite Inc. leased 1,240 square feet of space at 6837 W. Brown Deer Road, Milwaukee from Lake Cook-Sequoia Shopping Center LLC.
Smooth Skin Rejuvenation Center LLC leased 1,400 square feet of retail space at the southwest corner of North 124th Street and Capitol Drive in Brookfield from JDN Realty Corp.
Luis Blas d.b.a. Discount Cigarettes and Beer leased 1,582 square feet of retail space at 5320 S. 27th Street, Milwaukee from Kleczka Family Limited Partnership.
Associated Bank leased 25,148 square feet of office space at 330 E. Kilbourn Ave., Milwaukee, from Plaza East Inc.
Tri County Hearing Aid Service Inc. leased 1,077 square feet of retail space at 333 W. Brown Deer Road, Brown Deer, from North Shore Center Partners.
Verizon Wireless Personal Communications leased 3,326 square feet of retail space at N95 W18167-69 Appleton Ave., Menomonee Falls, from PH Menomonee Falls LLC.
Vista Marketing Inc. leased 1,990 square feet of office space at 5319 N. 118th Ct., Milwaukee, from Monterey Park Ltd.
CY2 LLC leased 2,378 square feet of retail space at 140 S. 1st St., Milwaukee, from 1818 LLC.
Athletic and Therapeutic Institute leased 3,500 square feet of retail space at the northeast intersection of I-94 and Highway 50 on 120th Avenue in Kenosha.
Iron Block Holdings LLC leased 3,825 square feet of office space in The Jefferson Building at 825 N. Jefferson St., Milwaukee, from Northridge Co.
Building Committee Inc. leased 8,938 square feet of space at 757 N. Broadway, Milwaukee, from The New 757 LLC.
Preferred Lending Group leased 3,527 square feet of office space at 342 N. Water St., Suite 810, Milwaukee, from 4041 Richards LLC.
Asset Recovery Network LLC leased 1,600 square feet of industrial space at 3540 N. 126th St., Unit H, Brookfield, from G&N Investment Company.
Kowal Investment Group LLC leased 4,045 square feet of office space at N16 W24132 Prairie Ct., Suite 200, Pewaukee, from Prairie Place LLC.
MC Sales leased 2,400 square feet of industrial space at 3540 N. 126th St., Unit G, Brookfieldd, from G&N Investment Company.
Winter, Kloman, Moter & Repp leased 9,959 square feet of space in Executive Center IV at 235 N. Executive Dr., Brookfield.
DeVry Inc. leased 7,361 square feet of space at Stone Ridge III at N14 W23833 Stone Ridge Dr. Waukesha.
Ameriprise Financial leased 745 square feet of space at Two Park Place, 10850 W. Park Place, Milwaukee.
Elmbrook Family Dental renewed its lease of 3,862 square feet of space and The Ritterbusch Group renewed its lease of 1,401 square feet of space at Executive Center III, 125 N. Executive Dr., Brookfield.
Judson & Associates
Wings and Whitetails leased 3,240 square feet of space at S84 W18693 Enterprise Dr., Muskego, from Hiram Miller.
Garage Tek leased 3,400 square feet of space at 21870 Watertown Road, Brookfield, from Brookfield Commerce Center.
Beef O’Brady leased 3,569 square feet of space at 1230 Georgetown Dr., Pewaukee, from Wauwatosa Savings Bank.
Thyme Saver Diners leased 2,000 square feet of space at 12670 W. North Ave., Brookfield, from Country Centre LLC.
Mid-America Real Estate
The Rec Room Plus leased 14,695 square feet of space at 1275 W. Capitol Dr., Pewaukee.
FedEx Kinko’s leased 1,996 square feet of space at Prairie Ridge Commons, 9900 77th St., Pleasant Prairie.
Universal Wireless leased 1,296 square feet at 4650 S. Howell Ave., Milwaukee.
Snap Fitness leased 3,160 square feet of space in Glenwood Crossings in Kenosha.
Joshen Paper & Packaging leased 27,808 square feet of industrial space at 8133 N. Granville Woods Road, Milwaukee, from Lamida Group LLC.
Allied Mortgage & Service and Tierra Subida Limited Partnership purchased 149,000 square feet of industrial space at 3100 W. Meinecke Ave., Milwaukee, from Park Industrial Center Inc.
Wired Ventures Brady LLC purchased 4,000 square feet of retail and multi-family residential space at 928-32 E. Brady St., Milwaukee, from S&J Properties of Milwaukee LLC for $250,000.
Wrightwood Capital purchased the 186,000-square-foot industrial building at 5111 S 9th St., Milwaukee, from Golfview LLC.
2300 South 170th Street LLC purchased the 33,120-square-foot industrial building at 2300 S. 170th St., New Berlin, from James and Doris Adler 1996 Revocable Trust.
5901 Vliet LLC purchased the 3,048-square-foot building at 5901-03 W. Vliet St., Milwaukee, from
Mark S. and Susan L. Strothmann.
Clover Leaf Group purchased the 136,000-square-foot warehouse building of Glendale Business Center at 6575-6693 Sidney Place, Glendale, from GBI Real Estate Investors for $5.065 million.
Germantown Iron & Steel purchased 6 acres of land on Alcan Drive in Jackson for $315,000 from Jackson Business Park.
Judson & Associates
International Brothers Electrical Union purchased 5,600 square feet of space at N8 W22520 Johnson Dr., Pewaukee, from VG Investments.
Bevco purchased 34,000 square feet of space at 21320 Doral Road, Brookfield, from Koch Family Partnership.
AFO LLC purchased 2,400 square feet of space at W300 N7672 Christine Lane, Merton, from Newfield Properties.
RFL purchased 5,708 square feet of space at W1361 Elmwood Ave., Ixonia, from Ten Bears.
Jetson & Partners purchased five acres at 10344 N. Cedarburg Road, Mequon from Great Bison LLC.
An affiliate of Varin Realty LLC purchased the 140-acre Willow Run Golf Course at 26506 Golf Road, Pewaukee, from The Fairways Group LP.
Rebecca Kasten Racing LLC purchased 4,800 square feet of retail space at W154 N11421 Fond du Lac Ave., Germantown, from EEH LLC.
Timberland Investments LLC purchased 1.6 acres in the Ixonia Industrial Park from the Town of Ixonia.
Juneau Gardens LLC purchased the 37,500-square-foot Juneau Apartments building at 1193 N. 29th St., Milwaukee, from Ritter Land Development.
Berghammer Construction Corp., Butler, was selected by Willow Tree Development to build the new 360,000-square-foot BuySeasons headquarters in the Westridge Business Park on Moorland Road, just south of I-43, in New Berlin.
MSI General Corp., Oconomowoc, was chosen by Frontier Development Inc. to design and build the 38,226-square-foot High Pointe Commons retail development on an 11-acre site at the northwest corner of Silver Spring Drive and Lilly Road in Menomonee Falls.