The Redevelopment Authority of the City of Milwaukee (RACM) approved about $25 million in revenue bonds for Oak Park, Ill.-based RSC & Associates’ Park East corridor apartment building development, called Park East Square.
RSC plans to build a 120-unit apartment building on the downtown Milwaukee block bounded by North Jefferson Street, East Lyon Street, North Milwaukee Street and East Ogden Avenue. The building will have about 4,000 square feet of retail space.
RSC plans to break ground on the project in late spring, but still needs to obtain financing. The tax-exempt bond approval will assist that process, said RSC chief executive officer Rich Curto.
“We’re in discussion with several banks,” he said. “In this market, it takes time to do that.”
It will take about 14 months to build the building.
The tax-exempt bonds are issued through the Midwest disaster area program. They are made available through the city, but are not financed or guaranteed by the city. The developer must come up with its own financing for the bonds.
The apartment building will be an L-shaped structure built along Jefferson and Lyon streets. A 200-space parking structure will be built in the middle of the block.
Part of the block, along Milwaukee Street and Ogden Avenue, will remain vacant until RSC can obtain financing to develop that portion. RSC plans to build a Hyatt Place hotel and Hyatt Summerfield Suites hotel on that part of the block. The firm hopes to get financing to begin construction of the hotels late this year or early in 2011, Curto said.
RSC had financing arranged in 2008 to build the hotels, but after the financing industry crisis hit the bank walked away, Curto said. Then the company shifted its focus to the apartment segment of the project.
“The financial market for rental apartments is relatively healthy,” Curto said.
Twenty percent of the apartments in Park East Square will be set aside to rent to people making 60 percent or less of the area’s income.

Milwaukee-based Marcus Corp. has signed a letter of intent to develop a movie theater complex on part of the Park East corridor site northwest of Water Street and Knapp Street, where Rainier Properties LLC is planning a mixed use development.
The company has been interested in developing a movie theater complex in downtown Milwaukee for a few years said Carlo Petrick, communications manager for Marcus Theatres. The site is attractive because of its proximity to the Water Street entertainment district of bars and restaurants, he said.
“It would compliment the existing entertainment venues and would expand the entertainment district,” Petrick said.
Marcus has signed a letter of intent to purchase approximately 1.5-acre of the 2.5-acre site.
The movie theater complex would be part of a larger mixed use development by Rainier Properties that would include about 280,000 square feet of office space, retail space and a parking structure.
But the movie theater will not be built unless the entire project moves forward, Petrick said.
That means Rainier needs to obtain office tenants before the project can break ground.
One of the most active tenants in the downtown Milwaukee office market right now is Von Briesen & Roper S.C., which is considering a relocation from its current headquarters at 411 E. Wisconsin Ave. The firm is seeking about 75,000 square feet with an option to grow into additional space in the future.
Randall Crocker, the president and chief executive officer of the firm said he hopes to have a decision made about the firm’s future headquarters by this fall. The firm has not ruled out staying in the 411 Building, but would prefer to move to another location, but said.
Von Briesen issued a request for proposals from office developers and building owners, but Crocker declined to say who responded, except to say the firm was “pleased with the response to our RFP.”
Other tenants that are considering moving to downtown Milwaukee office locations include Godfrey & Kahn S.C., Baker Tilly and CH2M HILL.
Marcus Corp.’s lease of about 40,000 square feet of office space at 100 E. Wisconsin Ave. for its corporate headquarters expires at the end 2013, according to a Milwaukee commercial real estate source.
The company could decide to move its office space to the development that includes its downtown movie theater complex. However, Petrick said, “at this point it’s premature to talk about that.”

The downtown Milwaukee office market improved slightly during 2009, according to Inland Companies fourth quarter office market report.
The downtown office vacancy rate improved from 20.11 percent in the first quarter to 19.85 percent in the fourth quarter.
The class A office space vacancy rate downtown improved from 12.46 percent in the first quarter to 11.97 percent in the fourth quarter. Absorption of class A office space downtown improved from negative 18,712 square feet to a negative 1,166 square feet.
The class B office space vacancy rate downtown remained high and remained flat from 27.97 percent in the first quarter to 27.29 in the fourth quarter.
However, the overall office market for the metro Milwaukee area increased from 17.5 percent in the first quarter to 18.88 percent in the fourth quarter.
Office tenants appear to be shifting in a flight to quality in the region. In all but one of the region’s office submarkets the class A vacancy rate is lower than the class B vacancy rate, according to the report.
For the entire Milwaukee metro area the class A office space vacancy rate is at 13.73 percent, according to the Inland report, compared to 18.88 for the total office market and 22.95 percent for the class B market.
The class A vacancy rate is at 10.09 percent in the west submarket (the Waukehsa County I-94 corridor) and 11.81 percent in the region’s northern submarket (southern Ozaukee County and northeastern Milwaukee County).
The northwest submarket (Menomonee Falls and parts of Milwaukee and Washington counties) is the only submarket in the region with a higher class A vacancy rate than class B vacancy rate. The class A vacancy rate in the northwest submarket is 25.22 percent and the class B vacancy rate is 5.92 percent.

S.C. Johnson & Son Inc. this week opened the new, 60,000-sqaure-foot Fortaleza Hall building at it headquarters campus at 1525 Howe St., Racine.
The new building has two distinct sections: Fortaleza Hall, which provides historical context for the company and the advances that continue to take place through displays and memorabilia, the Frank Lloyd Wright Library and Legacy Gallery; and The Commons, which offers employee services like dining, concierge services, company store, bank and fitness center in a comfortable environment.
Fortaleza Hall is the first major new building on the company’s international headquarters since 1967 when the Golden Rondelle, originally built as a movie theatre for the 1964-1965 New York World’s Fair, it was disassembled and brought to Racine where it was rebuilt.
Spherical in shape and made primarily of glass, Fortaleza Hall houses a full-size twin-engine S-38 amphibious plane suspended to simulate it in flight which can be viewed by all passers-by.
“This building is intended to inspire us, to be a special place to remind us of our sense of adventure,” said chairman and CEO, Fisk Johnson. “It is a symbol of our unique history of innovation, creativity and progressive attitude. My family wanted this to be a jewel for our community. Imagine a little boy or a little girl looking out a car window seeing that sight of the brightly colored S-38 amphibious plane soaring and in their minds being transported somewhere else by the adventure and romance of it all.”

Sales of U.S. existing homes plunged 16.7 percent in December to a seasonally adjusted annual rate of 5.45 million from 6.54 million in November, as the first-time homebuyer’s credit was set to expire. The 16.7-percent decline from November to December was the largest monthly dip on record, dating back to 1968, the National Association of Realtors (NAR) reported.
Still, sales in December were up 15 percent compared with December 2008.
The median sales price rose to $178,300 in December, up 1.5 percent compared with a year earlier. It's the first year-over-year increase in prices since August 2007.
For all of 2009, home sales increased 4.9 percent to 5.16 million compared with 2008. "The market is going through a period of swings driven by the tax credit," said Lawrence Yun, chief economist for the NAR. "We're likely to have another surge in the spring … Job creation is the key to a continued recovery in the second half of the year.”
The tax credit has been extended until June and expanded to cover repeat buyers, but buyers did not know the credit would be extended when they were shopping for homes in October.

The Village of Pleasant Prairie’s Community Development Authority plans to redevelop the former Midwest Copier/Manutronics property at 9115 26th Ave., Pleasant Prairie.
The Community Development Authority recently purchased the 2.25-acre property, which has a 25,448-square-foot building, for $475,000.
The village plans to demolish part of the building, remove a storm culvert and the parking lot on the east side of the property. The village then plans to reinstall a natural channel or creek to improve the flow of storm water and the alleviate flooding on the site.
The village plans to use about 16,500 square feet of the building for storage of public works equipment. About 4,000 square feet will be used as a small business light industrial incubator.

About 375 people attended the seventh annual BizTimes Commercial Real Estate & Development Conference, southeastern Wisconsin’s premier networking and information event for the industry, which was held in November at Potawatomi Bingo Casino in Milwaukee. The theme for this year’s conference was, “What Now? Strategies for Revival.”
The event featured a panel of national commercial real estate and economics experts. They included: Robert Bach, senior vice president and chief economist of Grubb & Ellis Co.; Rhyne Brown, executive vice president of client development at NAI Global; Ross Moore, executive vice president and director of market and economic research at Colliers International Property Consultants Inc.; Maria Sicola, executive managing director and head of research for the Americas at Cushman & Wakefield Inc. and Jack Durburg, executive managing director of the Chicago region for CB Richard Ellis.
For those who could not attend the event, BizTimes Real Estate Weekly has featured a video segment from the event for 9 weeks.
In the final video, the panelists give their outlook for the office, industrial and retail real estate markets. View the video by clicking here.

View the eighth week’s video segment, when the panel discusses their outlook for commercial real estate in second tier markets in the Midwest, such as Milwaukee. View the video by clicking here.
View the seventh week’s video, when the panel discusses current commercial real estate prices. See the video by clicking here.
View the sixth week’s video, when the panel discusses the government’s “extend and pretend policy,” by clicking here.
View the fifth week’s video, when the panel discusses when the U.S. commercial real estate market will recover, by clicking here.
View the fourth week’s video, when the panel discusses whether or not they are concerned about inflation in the U.S. economy, by clicking here.
View the third week’s video, when the panel talks about their outlook for the U.S. job market and how it will impact the commercial real estate market, by clicking here.
View the second week’s video, when the panel talks about what shape they expect the economic recovery to take, by clicking here.
View the first week’s video, when the panel talks about the greatest risk to sustained GDP growth for the U.S. economy, by clicking here.

C.I. Banker Wire & Iron Works Inc. recently purchased a 101,746-square-foot industrial building at 600 Perkins Dr., Mukwonago, from Bavaria Industries Inc. for $4.3 million. Dave Hazenfield of The Dickman Co. brokered the deal.

Dickman Company

• Reserve Advisors Inc. renewed its lease of 4,586 square feet of office space at 205 E. Wisconsin Ave., Milwaukee, from BC 205 Wisconsin LLC.

• Invacare Continuing Care Inc. leased 3,200 square feet of space at 3725 N. 126th St., Unit G, Brookfield, from Sunset Investment Company.

• Plunkett’s Pest Control Inc. leased 1,740 square feet of industrial space at 9350 S. 27th St., Oak Creek, from Farchione Investments II LLC.

Judson & Associates

• Crossmark Inc. leased 7,500 square feet of space at 2110 Pewaukee Road, Waukesha, from Sky Plaza LLC.

• Wesdon Industries LLC leased 1,400 square feet of space at 1275 Wisconsin Ave., Pewaukee, from Sawyer Enterprises.

• Stay Strong Therapies LLC leased 1,200 square feet of space at 1190 Richards Road, Hartland, from Lakeland Business Properties LLC.

Dickman Company

• Triple One LLC purchased a 13,400-square-foot industrial building at 111 W. Olive St., Glendale, from Shamrock Olive Street LLC for $514,000.

Judson & Associates

• JJES LLP purchased a 15,000-square-foot building at W223 N603 Saratoga Dr., Pewaukee, from TC Real Estate LLC.

Ogden & Company

• New Horizon Center Inc. purchased the Circle of Friends Day Care property at 7918 W. Capitol Dr., Milwaukee, from Southeastern Youth and Family Services Inc. The facility has a capacity for 102 children.

Company: NAI MLG Commercial
Title: Industrial associate           
Education: Marquette University, bachelor’s of science, double major in commercial real estate and finance.
Family: Bachelor.
City of Residence: Milwaukee       
Hobbies and Interests: “Working out, bow hunting, fishing, baseball/softball and any sports.”
What are you working on? “I am fortunate enough to be working on an extensive portfolio of sale and lease listings throughout metro Milwaukee and some of the highlights include an expandable 19,200-square-foot industrial building in Sussex, a 35,000-square-foot flex building in the Falls and a 10,500-square-foot industrial building in Waukesha. To go along with my listings I am also currently working a number of lease/sale transactions with both local and national companies to expand as well as upgrade spaces both in quality and square footage.”
How does the market look to you? “As a broker focusing on industrial properties the start of 2010 seems to be filled with a carryover of activity from the 4th quarter of 2009. There are a number of users out on the market actively touring properties, yet there remains the hesitancy to commit to the deal. A carryover from 2009 is that a tight lending environment has led to more activity as it relates to lease deals versus sale and it remains a tenant driven market. As the year progresses I believe we will fare much better than 2009. That being said, there will remain downward pressure on lease rates as owners continue to make concessions (improvements, rent abatement, lower rates) to land tenants. I also feel that there will be slight downward pressure on sale prices due in large part to distressed properties which remain on the market. All in all I expect the activity to continue as the year progresses and for there to be positive absorption in 2010 and that we will get back to the high 7 percent for vacancy in the metro Milwaukee area.”
What was the best deal you've ever been involved in? “The best deal has to be the first deal I was able to get done which was a 3,000-square-foot lease at 308 Wilmont Dr. in Waukesha. We were part of an open house and it just happened to be that the tenant saw the event going on and, long story short, we ended up signing the lease the next day.”
What was the funniest moment of your career? “I don’t know where to begin as every day seems to be filled with some pretty special moments but I would say it is between the following: hearing some of the things that come out of Adam Matson’s mouth on a day-day basis (he has no filter) and while touring a property with Curt Pitzen in my office having the female client we were touring walk in on me while using the restroom when I explicitly told them I was going in there.”

NAIOP Wisconsin Leadership Awards, designed to honor individuals who have demonstrated an extraordinary commitment and dedication to the chapter and its mission, were presented to Jerold Franke, president of Wispark LLC, and Mark Irgens, president and managing member of Irgens Development Partners. Both are credited with introducing NAIOP to the Milwaukee market and helping launch the chapter in 2003.
A second award honoring an individual for excellence in leadership on a critical issue related to commercial real estate and economic development in Wisconsin was awarded to J. Michael Mooney, chairman of NAI MLG Commercial. The award recognizes Mooney for his actions that have had a direct and positive impact on the industry.
NAIOP’s Wisconsin chapter also announced the members of its 2010 Board of Directors. They are: David Jorgensen of VJS Development serving as president, president-elect Shawn Cavin of Bank Mutual, Neal Driscoll of Liberty Property Trust as treasurer, Brett West of Kahler Slater/West Development as secretary, Tom Bernacchi of Towne Investments and Dave Domres of Irgens Development Partners as two past presidents. Directors include Scott Langlois of Quarles and Brady, Jim Parks of Berghammer Construction, Deborah Tomczyk of Reinhart Boerner Van Deuren, Todd Rizzo of Wispark LLC, Peter Ginn of Hendricks Development Group, Gregory Kost of Told Development, Lyle Landowski of Inland Companies, Jim Sedgwick of VJS Development, Greg Walz of Northwestern Investment Management Company and Richard Lincoln of the Mandel Group.

Brookfield-based Shorewest Realtors added Jenny Wiencek as a sales associate its Oconomowoc office and Robert Leverenz as a sales associate in its Burlington office.

Feb 11:  NAIOP Webinar:  Repositioning your Existing Asset with Adaptive Re-Use. 11:45 a.m. -1:15 p.m., Wipfli LLP, 10000 Innovation Dr., Wauwatosa. Register online at www.naiop-wi.org.

48th annual Milwaukee/NARI Home Improvement Show, Feb. 11-14, Wisconsin Exposition Center at State Fair Park, West Allis.

Feb 24:  Commercial Real Estate Government Day in Madison, 8 a.m. – 3 p.m., Madison.  Contact Jim Villa of CARW at (414) 271-2021 or Chris Korjenek of NAIOP at (262) 522-6375 for more information.

Feb 25:  NAIOP Webinar:  New Market Tax Credits to Finance Development. 11:45-1:15, GRAEF USA, 125 S. 84th St., Milwaukee. Register online at www.naiop-wi.org.

REACH (Real Estate Alliance for Charity) Winter Gala, Saturday, Feb. 27, 7:30-10:30 p.m., Milwaukee Public Market, 400 N. Water St., Milwaukee. For more information, call (414) 271-2021.

Mar 10:  NAIOP Tour of the Aloft Hotel, 4:30-6:30 p.m., Aloft Hotel, 1230 N. Old World Third St., Milwaukee. Register online at www.naiop-wi.org.

Mar 11:  NAIOP Webinar:  Risk Management Strategies for Successful Real Estate Development Projects. 11:45 a.m.-1:15 p.m., Wipfli LLP, 10000 Innovation Dr., Wauwatosa. Register online at www.naiop-wi.org.

Mar 25:  NAIOP Webinar:  ROI Analysis on LEED Building Components, 11:45-1:15, Wipfli LLP, 10000 Innovation Dr., Wauwatosa. Register online at www.naiop-wi.org.

• Building Owners and Managers Association

• Certified Commercial Investment Members

• Commercial Association of Realtors Wisconsin

• CoStar Group

• DNR brownfield services

• DNR contaminated property database

• Emporis Buildings

• Institute of Real Estate Management

• International Council of Shopping Centers

• Kenosha County property info

• LoopNet

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• Milwaukee Department of City Development

• Milwaukee property info

• NAIOP

• Reis

• Society of Industrial and Office Realtors

• Waukesha County property info