In a sign that the southeastern Wisconsin economy is still struggling, more office space in the region went vacant during the second quarter.
The Milwaukee area’s office space vacancy rate rose from 19.8 percent in the first quarter to 20.6 percent in the second quarter, according to the Commercial Association of Realtors Wisconsin (CARW) and Xceligent second quarter report.
The region’s office space had a negative absorption of 36,994 square feet of space during the quarter.
In downtown Milwaukee the office space vacancy rate is at 16.8 percent east of the river and 29.7 percent to the west of the river, according to the report.
The class A office space vacancy rate east of the river is at 11.8 percent, according to the report.
Other submarket office space vacancy rates in the second quarter were: Brookfield, 19.9 percent; Wauwatosa, 22.1 percent; Waukesha, 15.7 percent; North Shore, 19.9 percent.
The Milwaukee area’s industrial market is performing better than the office market. The region’s industrial space vacancy rate dipped slightly from 9.2 percent in the first quarter to 9.1 percent in the second quarter. The region’s industrial market had a net positive absorption of 1,298,118 square feet of space.
“(Commercial real estate) brokers are seeing a higher level of interest and activity as businesses and investors look to take advantage of the market and put themselves in a better position moving forward,” said Jim Villa, president and chief executive officer of CARW. “What we are not seeing yet, however, are the big deals that are a result of businesses growing, expanding and moving, nor are we seeing the kind of growth and development that helps drive the local market.”
Still, southeastern Wisconsin’s commercial real estate market continues to avoid the big busts that other more volatile markets are experiencing, Villa said.
“Our region continues to remain stronger than many markets where the boom far exceeded local growth,” he said. “We didn’t have the wild speculation that has contributed to the dramatic declines in property values and vacancies that you are seeing elsewhere.”
“Compared to other similar markets, southeastern Wisconsin continues to fare better despite the challenges being faced,” said Kevin Talbot, vice president of regional operations for Xceligent. “We expect that Milwaukee will continue to recover slowly, but at a stronger pace than many of the areas hardest hit.”

Milwaukee-based Northwest Asphalt Products Inc. plans to build a $3.5 million asphalt plant at 3205 W. Three Mile Road in the Town of Raymond in Racine County. The property is located southwest of I-94 and Three Mile Road.
The project was recently approved by the Raymond Town Board, despite the opposition by several residents. The plant still needs to be approved by Racine County and the Village of Caledonia.
Northwest Asphalt Products plans to purchase an 80-acre property for the plant from the owner of C.J. Flowers for $1.5 million, according to Raymond Town Board chairman Gary Kastenson. About 6 acres of the property will be used for the asphalt plant. C.J. Flowers plans to cease its operations in 3 years.
The asphalt plant will produce about 125 to 350 tons of asphalt per hour, according to Kastenson. The plant will operate from April to December.
Several residents in the town raised objections to the asphalt plant proposal. But Kastenson said he supports it because the company agreed to make improvements to Three Mile Road near the plant, the company plans to burn natural gas at the plant and the plant will provide an economic boost to the community.
“It will help our tax base tremendously,” Kastenson said.
The company has not yet applied for a permit from the state Department of Natural Resources for the plant. However, its plans to use natural gas there could be an advantage for the application.
“The fact that they plan to burn natural gas, that is a cleaner fuel than what is normally used in asphalt plants,” said Dan Schramm, air management supervisor of southeastern Wisconsin for the DNR. “Most of the (asphalt) plants use oil.”
Northwest Asphalt Products main plant is located at 11710 W. Hampton Ave., Milwaukee. Its sister company, Northwest Standard, has a plant at N52 W23615 Lisbon Ave., near Sussex. Both facilities include large storage silos.

The Art Institutes recently announced the opening of a new school, The Art Institute of Wisconsin, which will hold its first day of classes this fall.
The Art Institute of Wisconsin, the school system’s first location in the state, will occupy approximately 35,000 square feet of remodeled space at the P.H. Dye House at 320 E. Buffalo St. in Milwaukee’s Historic Third Ward.
The school has begun enrolling students.
“The Art Institutes system of schools is attracted to regions which share an enthusiasm for the creative arts, and Wisconsin is no exception,” says John Mazzoni, president of The Art Institutes. “We believe that Milwaukee has a growing and evolving economy that complements the academic offerings The Art Institute of Wisconsin will provide students who are pursuing a creative arts career.”
Initially, The Art Institute of Wisconsin will offer bachelor’s degree programs in advertising, digital filmmaking and video production, fashion marketing, graphic design, interior design, media arts and animation, and web design and interactive media, as well as an associate’s degree program in graphic design.
“We are delighted to open our doors to prospective students this fall,” said William Johnson, newly-appointed president of The Art Institute of Wisconsin. “Our aim is to develop the school as a leading creative arts destination in Wisconsin, and to be a collaborative educational partner with the communities we will proudly serve.”
Johnson, a Menominee Falls resident, previously served as president of The Art Institutes schools in Minneapolis, Phoenix and North Hollywood.
“The increased number of people working at and attending The Art Institute of Wisconsin will have a significant and positive impact in the Third Ward and among our neighbors. We look forward to being a member of the Third Ward community,” Johnson said.
The Art Institute of Wisconsin is accredited by the Accrediting Council for Independent Colleges and Schools to award bachelor’s and associate’s degrees and is authorized by the Wisconsin Educational Approval Board. For more information, visit www.artinstitutes.edu/milwaukee.

The City of Milwaukee’s Zoning and Neighborhood Development (ZND) committee unanimously last week to accept a proposal by Wisconsin Lutheran College to purchase the former Finney Library building at the intersection of Sherman Boulevard and North Avenue.
The proposed plan calls for the 9,000-square-foot building to be transformed into a youth education and parent resource center that will target prospective first-generation college students from low-income families. The Finney Library building has remained vacant since the nearby Washington Park Library was opened nearly seven years ago.
“Finding the right fit for this location has been a long and arduous process,” said Alderman Willie Hines Jr., president of the council, who lives a few blocks from the building. “But I think all of us are grateful for the final outcome. This is exactly what our community needs. Wisconsin Lutheran College will bring its proven track record to a neighborhood that desperately needs its young people to become more aware of higher education and the opportunities it can provide.”
Milton Cockroft, director of Pathways to College, said the Finney Library is an ideal location for the program to fulfill its vision of helping young people become the first members of their families to become college graduates.
“Wisconsin Lutheran College wanted to have a greater community presence in the central city, because it has traditionally been a well-kept secret, despite the fact that it is right here in Milwaukee’s backyard,” Cockroft said. “In our meetings with President Hines and others, it quickly became apparent that the Finney Library building was the perfect spot to establish that community presence.”
Pathways to College expects to open the new facility by the end of the year.

Dickman Company

General Plastics Inc. leased 7,200 square feet of space at 6631-33 N. Sidney Place, Glendale, from Glendale Business Center LLC.

Grubb & Ellis|Apex Commercial

Waterstone Mortgage leased 3,162 square feet of office space at N96 W17695 Riversbend Circle West, Germantown, from WJGM LLC.

Affiliated Consumer Services Inc. d.b.a. Century 21 leased 2,020 square feet of office space at 2031 E. Rawson Ave., Oak Creek, from Life Investors Oak Creek LLP.

Mid-America Real Estate

Arby’s Restaurant leased 4,141 square feet of space at Silvernail Shopping Center, 2132 Silvernail Road, Pewaukee, from Waukesha Retail LLC.

The UPS store leased 2,019 square feet of space at The Plaza Shopping Center, 17145-J Bluemound Road, Brookfield, from Inland Commercial Property Management Inc.

Bella Kitchen & Bath leased 1,786 square feet of space at Autumn Grove Plaza, 12850-960 W. Bluemound Road, Elm Grove, from Autumn Grove LLC.

AT&T Wireless Logic leased 1,739 square feet of space at Burlington Retail Center, 2088 Milwaukee Ave., Burlington, from Highway 36/W Associates.

NAI MLG Commercial

Food Pantry of Waukesha County leased 13,800 square feet of space at 1301 Sunset Dr., Waukesha, from Sunset West LLC.

Milwaukee-based Inland Construction was recently been awarded the 14,176-square-foot tenant improvement for Strayer University at Honey Creek Corporate Center IV, 9000 W. Chester Ave., Milwaukee. Inland Construction was also recently been awarded the ground up construction of a new 13,750-square-foot office/warehouse facility for the E.J. Welch Company in the Westbrook Corporate Center at W126 N8652 Westbrook Crossing in Menomonee Falls.

West Allis-based Triad Constructions recently began work on a two floor remodeling project for DAAR Engineering, 518 W. Cherry St., Milwaukee.

Deadline for WCREW Showcase Awards nominations is Thursday
The deadline to make a nomination for the annual Wisconsin Commercial Real Estate Women (WCREW) Showcase Awards is Thursday, July 8.
Nominations can be submitted by filling out the form at:  http://www.wcrew.org/quikform/nominate. 
The awards event will be at 5 p.m. on Thursday, Oct. 14, at Discovery World on Milwaukee’s lakefront.
More information on the categories may be found at: http://www.wcrew.org/calendar/event/showcase-awards

Mequon Elite Sports Club expanding
Elite Sports Clubs is expanding its Mequon club at 11616 N. Port Washington Road.
Mequon Elite Sports Club is renovating 14,000 square feet of its existing facility and constructing an additional 7,000 square feet of new space.
The project will include several new features including a new aquatic center with indoor and outdoor salt water pools, kiddie pool and lap pool; basketball court, and more. 
The expansion has been done in various phases, to allow members to continue to use the club during construction.

July 15:  NAIOP Fiesta Boat Cruise, 5-7 p.m. on the Edelweiss II, departing from the Port of Call Bistro, 106 W. Wells St., Milwaukee. Go to www.naiop-wi.org for more information.

July 22:  NAIOP Webinar: FDIC Asset Disposition Programs; 11:45 a.m. – 1:15 p.m., Wipfli LLP, 10000 Innovation Dr., Wauwatosa. Go to www.naiop-wi.org for more information.

CARW Lunch and Learn, Sustainable Building, July 26, 12-2 p.m., CARW office, 12300 W. Center St., Milwaukee.

Wisconsin Commercial Real Estate Women (WCREW) golf outing, Tuesday, Aug. 3, Broadlands Golf Club, North Prairie. For more information call (414) 545-8500.

SIOR Golf Outing, Friday, Aug. 6, 11 a.m., Blackwolf Run, Kohler. For more information, call (414) 333-2974.

CARW Lunch and Learn, Title and Deed, Aug. 23, 12-2 p.m., CARW office, 12300 W. Center St., Milwaukee.

CARW Lunch and Learn, State Issues for Fall Election, Sept. 27, 12-2 p.m., CARW office, 12300 W. Center St., Milwaukee.

Riverworks Center Brokers Open, Thursday, Sept. 30, Richards Street Armory, 4108 N. Richards St., Milwaukee. For more information call (414) 906-9650.

CARW Lunch and Learn, Multi-Family and Investment Properties, Oct. 25, 12-2 p.m., CARW office, 12300 W. Center St., Milwaukee.

CARW Lunch and Learn, Industrial: Leasing, Sales and Negotiating, Nov. 15, 12-2 p.m., CARW office, 12300 W. Center St., Milwaukee.

CARW Lunch and Learn, Construction Cost, Dec. 13, 12-2 p.m., CARW office, 12300 W. Center St., Milwaukee.

• 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

• Menomonee Valley Partners

• Milwaukee Department of City Development

• Milwaukee property info

• NAIOP

• Reis

• Society of Industrial and Office Realtors

• Waukesha County property info

• Wisconsin Commercial Real Estate Women