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Wednesday, October 8, 2014
Gas Light Building is for sale
October 8, 2014 10:46 AM
The iconic Gas Light Building in downtown Milwaukee, known for the weather beacon “flame” lamp mounted on top of the building that changes color based on forecast weather conditions, is for sale.

The 20-story, 131,727-square-foot Art Deco inspired building is located at 626 E. Wisconsin Ave. It was built in 1930 by the Wisconsin Gas Company and was designed by Eschweiler & Eschweiler.

The building is being listed for sale by Jim Postweiler of JLL (formerly known as Jones Lang LaSalle). The building is owned by a group of Wisconsin-based investors, he said. The registered agent for the building's ownership group, named 626 East LLC, is James Drescher, according to state records.

"They've been good stewards of the property," Postweiler said. "They've done a fair amount of work on the building. They've upgraded the mechanical systems but maintained the architectural integrity. They've owned it for several years."

The building has an assessed value of $10,678,000, according to city records. There is no asking price for the building, Postweiler said. Some groups have already expressed interest in purchasing the building, he said.

"We've got good interest and we expect good interest," Postweiler said.

The building’s office space is 87 percent occupied, according to JLL. The building is anchored by the United States Forest Service, which occupies 91,767 square feet on nine floors with a lease through August of 2023. The building is the headquarters for the U.S. Forest Service’s Eastern Division, which covers the agency’s operations in 20 states.

The property has a six-story, 212-space parking structure that was built in 2002, plus 42 surface parking spaces.

The building was completely renovated in the mid 2000s at a cost of nearly $3 million, according to JLL. Additional improvements done in 2013 and this year, including façade repair, security system and parking garage enhancements and electric system upgrades, cost about $310,000.

In 2013 the neon tube lighting system in the weather beacon “flame” lamp was replaced with an LED lighting system. The new LED system allows for millions of colors and other lighting schemes outside of the beacon’s tradition red-gold-blue system (red light for warm weather, gold for cold weather, blue for no change in the weather, blinking light for precipitation).

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Region’s industrial market boom continues in Q3
October 8, 2014 10:51 AM
The southeastern Wisconsin industrial real estate market continued to perform well in the third quarter. The market absorbed 1.2 million square feet of industrial space, the 17th consecutive quarter of positive absorption for the market, according to the latest report from Xceligent and the Commercial Association of Realtors Wisconsin.

The region’s industrial space vacancy rate fell to 5.53 percent in the third quarter, down from 6.68 percent a year ago and 5.82 percent in the second quarter. The region’s industrial space vacancy rate has been on a steady decline since peaking at 9.75 percent in 2008 during the Great Recession.

The largest industrial space lease in the region during the third quarter was signed by Quad-Graphics which leased the former American TV warehouse building at W228 N2801 Duplainville Road in Pewaukee.

Third quarter industrial space vacancy rate and absorption by county:
- Milwaukee, 480,284 square feet, 8.24 percent
- Kenosha, 307,891 square feet, 4.03 percent
- Waukesha, 157,929 square feet, 3.8 percent
- Ozaukee, 133,894 square feet, 5.77 percent
- Racine, 72,234 square feet, 3.77 percent
- Washington, 57,228 square feet, 4.52 percent
- Walworth, 24,350 square feet, 3.18 percent
- Sheboygan, 0 square feet, 4.33 percent

Of the 1.2 million square feet of industrial space absorbed in the region during the third quarter, 420,300 square feet was a result of owner-occupied building additions. The largest was a 250,000-square-foot addition built by Rust-Oleum to a facility at 8505 50th St. in Kenosha. Another 1.43 million square feet of building additions and 4.7 million square feet of new construction is scheduled to be completed by the end of the year, according to Xceligent.


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Region's office market builds momentum in Q3
October 8, 2014 10:53 AM
The southeastern Wisconsin office market appears to be gaining some sustained momentum. The market absorbed 104,270 square feet of office space during the third quarter and has now absorbed 556,653 square feet of space over the past year, according to the latest report from Xceligent ad Commercial Association of Realtors Wisconsin.

The region’s office space vacancy rate dipped to 19.09 percent in the third quarter, down from 20.59 percent a year ago and 19.4 percent in the second quarter.

The largest office space lease in the region during the third was a 22,178-square-foot lease by Springfield College at The Timbers Building in The Tannery complex at 700 Virginia in Milwaukee.
The downtown east class A office market had a vacancy rate of 9.6 percent in the third quarter.

Office space vacancy rates for selected submarkets (all classes):
- Downtown East: 16.9 percent
- Downtown West: 29.1 percent
- Mayfair/Wauwatosa: 23.2 percent
- North Shore: 28.1 percent
- Northwest: 13.8 percent
- Third Ware/Walker’s Point: 16.2 percent
- Waukesha/Pewaukee: 14.0 percent
- Brookfield: 20.2 percent
- West Allis: 11.9 percent


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Region's retail market recovering from tough start to the year
October 8, 2014 10:55 AM
After a tough first quarter, the southeastern Wisconsin retail real estate market continued to show improvement in the third quarter, according to the latest report from Xceligent and the Commercial Association of Realtors.

The region’s retail market absorbed 77,975 square feet of space during the third quarter. The largest retail space lease deals in the quarter were for Hobby Lobby, which leased 65,000 square feet of space in Menomonee Falls and 55,000 square feet of space in Kenosha.

However, the market was hurt by the closing of three AMF bowling centers, vacating a total of 135,000 square feet of space. The market still has negative absorption of 66,535 square feet of space for the year due to first close Kmart and Sears store closures.

The region’s retail space vacancy rate held steady at 8.4 percent, the same as the second quarter, up from 7.7 percent at the end of 2013.

Third quarter retail space vacancy rates by county:
- Washington, 6.9 percent
- Waukehsa, 7.4 percent
- Milwaukee, 8.5 percent
- Kenosha, 8.9 percent
- Walworth, 10.3 percent
- Sheboygan, 11.0 percent
- Racine, 11.9 percent

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MLG buys land for Germantown business park
October 8, 2014 11:01 AM
An affiliate of MLG Capital recently purchased 120 acres in Germantown, including a 103-acre site at W192 N10021 Appleton Ave. for $1,169,200, to develop the Willow Creek Business Park of Germantown.

Site grading and infrastructure work will begin soon, said Barry Chavin, principal of MLG Capital.

The first user to commit to the business park is TJ Hale, which will move to a 218,000-square-foot building that will built there.

The entire development could accommodate 500,000 to 600,000 square feet of development, Chavin said. The park could be expanded in yet to determine future phases, he said.

Demand for the park will be driven by the low vacancy rate and healthy absorption pace of the region’s industrial market. Chavin said two other users have expressed interest.

“There’s almost no vacancy (in the region’s industrial market),” Chavin said. “There’s very little product out there. You’re starting to see some new construction, finally.”

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Ceremony today will kick off Posner Building redevelopment
October 8, 2014 11:03 AM
A ceremonial toast will be held today to celebrate the start of construction for the redevelopment of the 106-year-old Posner Building at the northwest corner of Wisconsin and Plankinton avenues in downtown Milwaukee.

HKS Holdings LLC plans to convert the building into 105 apartments with ground floor retail space.

The seven-story building, located at 152 W. Wisconsin Ave., is best known as the home for the downtown location for Mo’s Irish Pub, which will remain there. But the upper floors have been vacant for years.

The Wisconsin Housing and Economic Development Authority will provide $13.75 million in financing for the redevelopment project and the city of Milwaukee will provide up to $2.5 million in tax incremental financing. The overall cost of the project is estimated to be between $20 million and $25 million.

HKS recently bought the building for $3.4 million from an affiliate of Mo’s Restaurants.
KBS Construction is the project’s contractor and Engberg Anderson is the architect.

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Mandel Group breaks ground for three development projects
October 8, 2014 10:49 AM
Mandel Group Inc. held a groundbreaking ceremony last week to celebrate the start of a project in Brookfield and will hold another groundbreaking ceremony this week to start a project in Wauwatosa, and yet another next week to celebrate the start of a project in Milwaukee.

Last week the firm celebrated the start of construction for PrairieWalk at Towne Center, a 56-unit, two-building luxury apartment development within the mixed-use Sendik’s Towne Centre southwest of Capitol Drive and Brookfield Road in Brookfield. Residents are expected to start moving in in July of 2015.

“PrairieWalk is a further example of our strategy for high-value apartment development in suburban settings,”said Robert B. Monnat, chief operating officer of Mandel Group. “Like our developments in Shorewood and Whitefish Bay, PrairieWalk in Brookfield gives our future residents the opportunity to leave their car in the garage and walk to a great grocery, restaurants, shops and services.”

PrairieWalk is one of only a few opportunities in the City of Brookfield to build luxury apartments within a walkable neighborhood setting. Mandel Group previously developed Norhardt Crossing adjacent to Ruby Isle Shopping Center in 2001, located in the city’s Civic Center neighborhood. Norhardt Crossing has had near-full occupancy since its opening.

“We strongly believe that properties demonstrating high walk-ability will retain their appeal and their value as our population ages,” Monnat said. “It’s really difficult to find these types of opportunities in most suburbs.”

On Thursday, Oct. 9, Mandel Group will host a groundbreaking ceremony to celebrate the start of construction of the 188-unit Echelon Apartments development at the Innovation Campus, located northeast of U.S. Highway 45 and Watertown Plank Road in Wauwatosa.

On Monday, Oct. 13, Mandel Group will host a groundbreaking ceremony to celebrate the start of construction of the third phase of its North End project at the corner of North Water and East Pleasant streets in downtown Milwaukee. The third phase of the North End will have 168 luxury apartments and a Fresh Thyme Farmers Market store.

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Boerke Company selected by West Allis to market two development sites
October 8, 2014 10:48 AM
The Community Development Authority of the City of West Allis has selected Cushman & Wakefield | The Boerke Company to market separate development sites in the city.

Boerke Company will market the 7.6 acre Six Points development site at the southwest corner of W. Greenfield Avenue and Six Points Crossing, and an 11.5 acre build-to-suit opportunity at the Juneau Highlands Development site located at 1960 S. 67 Place.

The 7.6 acre Six Points Crossing site is just west of the recently built, and fully occupied Six Points Apartment multi-family development. Based on recent announcements from large employers, including Johnson Controls, Children’s Hospital, Brookdale Senior Living, and Konecranes a total of over 1,850 jobs will be coming to the area. Therefore, the site could have potential for a multi-family development.

“After our preliminary market study, our research predicts there will be an over 240 housing unit loss in a five mile radius from the site in the next few years, and with this huge influx of jobs, this area will be in serious need of quality housing,” said Boerke Company Principal Jack Price. “Having a proactive CDA, like what we have here in West Allis, that is open to providing incentives for high caliber taxable projects at both of these sites is huge for developers, and if the project is deemed significant for the neighborhood, the buyer could see millions of dollars in incentives.”

The Juneau Highlands Development, which is located a few blocks south of the Six Points Crossing site, is pad ready for up to a 150,000 square-foot industrial or manufacturing building. The site has a retention pond, access to rail, and is located in a TIF district.

“When we secured the listing agreement from the West Allis CDA, our industrial team immediately saw great potential for this site because of its central location and access to a strong workforce in the surrounding area,” said Patrick Dedering, who is part of the Boerke team marketing the Juneau Highlands site. “It is rare that a build-to-suit site in a great location with incentives like this one is on the market for long, so we expect buyers and developers to line up quickly for it.”

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Corner Bakery to open on Oct. 20 at Mayfair Collection
October 8, 2014 11:00 AM
Corner Bakery Cafe will open its first Wisconsin café on Monday, Oct. 20 at 11500 W. Burleigh St. in the Mayfair Collection development in Wauwatosa. The café will occupy a 4,000-square-foot space next to a Men’s Wearhouse store.

The local Corner Bakery franchise group is family owned and operated by Dimitri and Peter Dimitropoulos, who together have been restaurateurs in Milwaukee for the past 15 years. The brothers plan to open a total of 10 cafe’s in the Milwaukee and Madison areas within the next five years.

“We are thrilled to bring Corner Bakery Cafe to Milwaukee,” said operating partner Peter Dimitropoulos. “With our fresh, ingredient-inspired food at an affordable price, best-in-class catering and pleasant dining experience, we’re confident Corner Bakery Cafe will soon become a favorite among Milwaukee residents.”

Corner Bakery Cafe is a fast-casual restaurant serving breakfast, lunch and dinner with more than 170 locations in 18 states and Washington, D.C.

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Commercial Real Estate and Development Conference will focus on major projects
October 8, 2014 11:05 AM
A panel of local developers working on some of the most transformative development projects in southeastern Wisconsin will highlight the 12th annual BizTimes Milwaukee Commercial Real Estate and Development Conference.

The event will be held from 7:30 to 9:30 a.m. on Friday, Nov. 14, at Potawatomi Hotel & Casino in Milwaukee.

The keynote speaker for the event will be Lawrence Yun, chief economist and senior vice president of research for the National Association of Realtors. He will give an overview of the national real estate outlook.

Also, a panel of prominent local developers working on some of the largest development projects in the region will be featured at the conference. They will include:

- Mark Irgens, CEO and manager of Irgens. The firm is building 833 East, a 17-story, 358,000-square-foot office tower under construction in downtown Milwaukee. The firm is also working on a mixed-use development plan for the Ruby Farm property in Brookfield.
- Jerold Franke, president of Wispark LLC. The firm is leading a team of developers for the 85-acre Drexel Town Square development, which will create a mixed-use downtown area for Oak Creek.
- Scott Yauck, president and chief executive officer of Cobalt Partners LLC, which is working on a mixed-use development in Menomonee Falls called Whitestone Station, which is one of the largest brownfield redevelopment projects planned in the state.

The panel will be moderated by Dr. Mark Eppli, interim James H. Keyes Dean of Business Administration and Robert B. Bell Sr. Chair in Real Estate at Marquette University.

Marquette and the Commercial Association of Realtors Wisconsin (CARW) are event partners for the BizTimes Milwaukee Commercial Real Estate and Development Conference.

To register for the conference, visit www.biztimes.com/creconference.


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Leases
October 8, 2014 10:57 AM

Judson & Associates

Armstrong Consolidated Enterprises Inc. leased 1,390 square feet of space at 12600 W. Burleigh Road, Suite A, Brookfield, from Patris Properties LLC.

Mid-America Real Estate
 
TJ Maxx leased 25,012 square feet of sapce at Mayfair Collections, 11500 W. Burleigh St., Wauwatosa.
 
Marshall's leased 24,822 square feet of space at Mequon Pavilions, 10930 N. Port Washington Road, Mequon.
 
Buffalo Wild Wings leased 11,000 square feet of space at 4005 State Highway 28, Kohler.

Dollar General leased 9,497 square feet of space at 3440 Douglas Ave., Racine.
 
Jason's Deli leased 4,906 square feet of space at Brookfield Square, 95 N. Moorland Road, Brookfield.
 
AT & T leased 2,766 square feet of space at Timmerman Commons, 10400 W. Silver Spring Dr., Milwaukee.

Wingstop leased 2,080 square feet of space at Layton Avenue Shopping Center, 2300 E. Layton Ave., St. Francis.
 
NAI MLG Commercial

Gierke Frank LLC leased 2,652 square feet of space at 1011 N. Mayfair Road, Wauwatosa, from 1011 Mayfair Road Limited Partnership.

Trillium Care Group leased 2,348 square feet of space at 10150 W. National Ave., West Allis, from Somerset Green WM Propco LLC.

Visage Facial Plastic Surgery S.C. leased 1,915 square feet of space at 19275 W. Capitol Dr., Brookfield, from SB1 Pleasant Prairie WI LLC.

The MGS Group leased 1,345 square feet of space at N81 W14966 Appleton Ave., Menomonee Falls, from MP Falls Plaza LLC.

Ambulatory EEG Recordings LLC leased 1,248 square feet of space at 10701 W. North Ave., Wauwatosa, from Mayfair Business Center LLC.

Keith D. Weiner and Associates leased 836 square feet of space at 16535 W. Bluemound Road, Brookfield, from Hakaduli Squires I LLC.

Siegel-Gallagher

The Krivous Group leased 5,814 square feet of office space at 500 Elm Grove Road, Elm Grove, from Building Trades United Pension Trust Fund.

GoGeddit leased 1,820 square feet of space at 129-33 W. Pittsburgh Ave., Milwaukee.

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Andrew Weiland BizTimes Real Estate Weekly is compiled by BizTimes Milwaukee managing editor Andrew Weiland. This bulletin is published every Wednesday morning. Send real estate news tips to Andrew.Weiland@biztimes.com or call him at (414) 277-8181, ext. 120.

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