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Wednesday, August 5, 2015
Metro Milwaukee home sales up 12 percent in July
August 10, 2015 12:20 PM
Home sales in the four county metro Milwaukee area were up 12.1 percent in July, according to the latest report from the Greater Milwaukee Association of Realtors.

There were 2,199 homes sold in July versus 1,962 the same month in 2014. July was the sixth month of positive sales and fifth month of double digit sales, both consecutive, this year.

“The housing market is functioning very efficiently,” said GMAR president Mike Ruzicka. “Buyers are out in force and very active. Sellers are pricing their homes correctly, with many homes in ‘move in’ condition receiving multiple offers. Overall, the market appears to be balanced, with neither the buyer nor the seller dictating pricing.”

Each month in the first quarter saw double digit increases in listings, but since then only one month had an increase. June’s 3.1 percent increase in listings, while welcome, was anemic compared to what the market was consuming, Ruzicka said.

The seasonally adjusted inventory level (the time it would take to sell all of the homes on the market at a given time) for July was 7.4 months, down from June’s 7.7 month level. The seasonally adjusted level was 8.5 months in July 2014.

“Tight inventory – the theme of the 2015 market – is holding back some buyers, causing them to delay their purchase a few weeks until a home is listed that is to their liking,” Ruzicka said. “This presents an opportunity for sellers who are thinking about getting into the market this summer and into the fall.”

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Mixed-use project planned at former Federal Mfg. site in Walker’s Point
August 5, 2015 10:55 AM
Milwaukee-based Craft Development LLC announced today that it is planning a mixed-use redevelopment project for the former Federal Manufacturing Co. site at South 2nd Street and Walker Street in Milwaukee’s Walker’s Point neighborhood.

Last year Federal Manufacturing moved out of several buildings in Walker’s Point to a new 78,000-square-foot industrial building in Pewaukee.

The redevelopment project by Craft Development will consist of three properties with two existing buildings. Preliminary plans for the project, called Federal Commons, include a new 36-unit market-rate apartment building at 822 S. 2nd St., a 6,000-square-foot event space in an existing building at 838 S. 2nd St. and a 10,500-square-foot commercial office space redevelopment of an existing building with a surface parking lot at 829 S. 1st St.

Craft Development is collaborating on the project with the land owner, Federal Real Estate Holdings LLC. Craft also did the redevelopment project to convert the former Federal Manufacturing Co. building at 201 W. Walker St. into the new headquarters for Saz’s Hospitality Group.

“(Federal was) interested in staying involved in the neighborhood where they had spent so many successful years doing business, and I wanted to build on the momentum created by Saz’s new facility across the street,” said Dan Katt, owner of Craft Development. “We share a common vision for the project, and are excited to be moving forward.”

Katt said a couple of potential tenants, whom he declined to name, have expressed interest in the office space in the project.

The project is expected to be complete in 2016, with the event space and commercial office space redevelopment completed in the spring and the apartments opening in the fall.

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Downtown condo market is stagnant, Mandel Group report says
August 5, 2015 10:15 AM
The downtown Milwaukee condo market remains stagnant, except for condos selling above $500,000, according to a mid-year market report from Milwaukee-based multi-family housing development firm Mandel Group Inc.

For the first six months of the year there were 247 condo sales above $100,000 in the five zip code downtown area, according to Mandel Group. That compares to 246 sales for downtown condos above $100,000 for the first half of 2014. For all of 2014 there were 477 downtown condo sales above $100,000, according to the firm.

The downtown Milwaukee condo market boomed prior to the Great Recession. But when the housing market bubble burst the downtown Milwaukee condo market collapsed. There has been very little condo development downtown since then, while at the same time there has been a surge in apartment development downtown in recent years.

“We’re continually asked, ‘When will we see new condos built downtown?’ So we continue to look for signs of recovery,” said Robert Monnat, chief operating officer of Mandel Group. “We’re certainly through the hard bottom of this cycle and are recouping lost value, but we’re a long way from justifying new construction.”

The luxury condo market is faring better than the overall downtown condo market, according to the Mandel report. Luxury condos, priced over $500,000, had average sales prices of $861,340, or $338 per square foot, for the first half of 2015 and comprised 14 percent of total condo sales, up from 9 percent in the first half of 2014. Luxury condos sales downtown were at $313 per square foot during the peak of the market.

Mandel Group says it doesn’t foresee a near-term transition of the market from apartment development to new condo development.

“Too many factors are outside their respective ranges of risk or feasibility to suggest any large numbers of new condos anytime soon,” Monnat said. “Many aspects of the transaction structure would need to move in order to create the right recipe for new downtown condo development in meaningful numbers.”

Those factors include sales prices, buyers sharing more of the risk of the transaction, and banks willing to make construction loans, he said. Mandel Group estimates that average sales prices would need to exceed $400 per square foot to justify new condo development downtown.
“Even as a sales price above $400 per square foot, you may not be able to achieve the quality levels you would have expected eight or nine years ago,” Monnat said.

Mandel Group will continue to focus on its luxury apartment developments. It is building several downtown and in the suburbs.

“We have more than enough opportunity before us solely focusing on apartments,” Monnat said. “Demographics, consumer preference, an evolving jobs market and appetite for investment real estate combine to create an efficient model for meeting near-term housing demand, in particular in the downtown environs.”

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Marquette Real Estate Strategies Conference to be held on Sept. 10
August 5, 2015 10:31 AM
The Center for Real Estate at Marquette University will hold its fourth annual Real Estate Strategies Conference on Thursday, Sept. 10, in the Monaghan Ballrooms at Alumni Memorial Union on the MU campus in Milwaukee. The event will be held from 12:30 p.m. to 6:30 p.m.

The conference will include an update from MU president Mike Lovell on the university’s campus master plan and an economic forecast and analysis of industry trends by Dr. Mark Eppli, Marquette’s Robert B. Bell S. Chair in Real Estate.

The conference will also include a breakout session on the changing real estate needs for changing demographics, with a panel consisting of former Milwaukee city planning director Peter Park, former Mandel Group executive Richard Lincoln and Wauwatosa Mayor Kathleen Ehley.

Another breakout session will be held on the industrial movement, with a panel consisting of Mike Fardy, president of Colliers International|Wisconsin; Mike Yungerman of The Opus Group; Tim Walsh of Exeter and Sam Badger of NAI/Hiffman.

The conference will also have a future of the workforce panel.

April Rinne, a global authority on the sharing economy, a speaker at the World Economic Forum and the Aspen Institute Conference on Ideas, will be the keynote speaker at the conference. She will discuss how the sharing economy will impact our lives, the future of business and the real estate industry.

More information about the conference is available at http://business.marquette.edu/re-conf.

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Stella & Chewy’s headquarters sold for $22.6 million
August 5, 2015 11:02 AM
An affiliate of New York-based Lexington Realty Trust, a real estate investment trust, purchased the new Stella & Chewy’s headquarters building for $22.6 million, according to state records.

The 164,007-square-foot building, completed earlier this year, was built by Rosemont, Ill.-based Venture One Real Estate. An affiliate of Venture One sold the building to the Lexington Realty Trust affiliate.

Stella & Chewy’s, a producer of natural pet food for dogs and cats, moved from Milwaukee into the Oak Creek building in May. The building has 90,000 square feet of production space, 24,000 square feet of office space, 20,000 square feet of dry storage space and 20,000 square feet of freezer storage space.

The building is located at 111 W. Oakview Parkway in the OakView Business Park, a 220-acre business park that is being developed by Wispark LLC southwest of West Oakwood Road and South Howell Avenue.

Venture One bought the 17.8-acre site last year for $1.55 million. The site has enough space that the building could be expanded to 280,000 square feet of space in the future.

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Pick ‘n Save-anchored retail property on Mayfair Road sold for $19.9 million
August 5, 2015 11:01 AM
An affiliate of New York-based DRA Advisors LLC, purchased the Pick ‘n Save anchored retail property at 1717 N. Mayfair Road in Wauwatosa for $19.9 million, according to state records.

The property was sold by an affiliate of Beachwood, Ohio-based DDR Corp., which acquired it last year for $20.3 million.

The 5.2-acre site on the west side of Mayfair Road consists of a 60,598-square-foot Pick ‘n Save store, a 3,015-square-foot building occupied by a Mattress Firm store, a 6,136-square-foot multi-tenant building.

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250 Plaza building sold for $9.75 million
August 5, 2015 11:03 AM
An affiliate of two Chicago firms paid $9.75 million for the 250 Plaza office building in downtown Milwaukee, according to state records.

On Monday, real estate firm JLL announced that Fulcrum Asset Advisors and Millbrook Properties had acquired the 20-story office tower at 250 E. Wisconsin Ave. The building was sold by Dallas-based Lone Star Funds.

The building was acquired by Lone Star Funds in 2013 for $7.5 million, after the building had gone into receivership in 2009. Its current assessed value is about $7 million, according to city records.
The 200,044-square-foot 250 Plaza building was constructed in 1973 and has struggled in recent years with a high amount of vacancy. The building’s current occupancy rate is just 31.6 percent, according to one source. Tenants in the building include Regus, Brown and Caldwell, Regal Investment Group and Scottrade.

Fulcrum and Millbrook plan to make numerous improvements to the building, including upgrades to the building’s amenities with a fitness center with a bike room and shower facilities, wi-fi lounge, conference center and attached covered parking. Renovations will include the main lobby and entrance, the common corridors and restrooms, a comprehensive elevator modernization including new elevator cab interiors, and major work in the parking garage to add lighting.

The building will be rebranded as Two Fifty East.

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Meijer opens stores in Wauwatosa and Oak Creek
August 5, 2015 10:59 AM
Grand Rapids, Mich.-based Meijer Inc. opened new stores Tuesday in Wauwatosa and Oak Creek.

The Oak Creek store is located in the Drexel Town Square development southwest of Howell and Drexel avenues.

The Wauwatosa store is located on the south side of Burleigh Street, at 112th Street, across Burleigh from the Mayfair Collection development.

The two stores will have a total of nearly 600 employees, the company said.

The two stores are part of a $750 million investment that Meijer is making as it enters the Wisconsin marketplace. In June, Meijer opened stores in Grafton and Kenosha. The company also plans to open stores in Sussex, Waukesha, Greenfield, West Bend and Sheboygan.

Meijer stores include full grocery and general merchandise departments and are typically 192,000 square feet in size. The company now operates 222 stores in six states and plans to open two to three new Wisconsin supercenters per year through 2019.

“Since opening our first two stores in the state six weeks ago, local residents and new customers have welcomed us with open arms and responded positively to the new shopping option we offer in Wisconsin,” co-chairman Hank Meijer said. “We are thrilled to be opening our Wauwatosa and Oak Creek supercenters, giving us the opportunity to provide a quality one-stop shopping experience to more communities around Milwaukee.”

“Our teams have worked very hard to prepare and we’re excited to bring our stores to Wauwatosa and Oak Creek,” Meijer president J.K. Symancyk said. “We do our best to find locations that will best serve communities and are looking forward to building on the excitement of our first four stores in Wisconsin in the years to come.”

With the stores openings, Meijer made $25,000 donations to the Wauwatosa Public Library Foundation and the Oak Creek Public Library to fund an internet café at each location. The donations will allow the public libraries to purchase technology and necessary furnishings for the creation of a young adult space.

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Second building acquired for Global Water Center
August 5, 2015 11:06 AM
Global Water Center II LLC, an affiliate of Milwaukee-based real estate development firm HKS Holdings LLC and the Global Water Center, recently purchased a 121-year-old industrial building at 326-332 W. Florida St. for $950,000, according to state records.

The property, which consists of a two-story building attached to a five-story building, will provide additional space for tenants of the nearby Global Water Center, located in a renovated seven-story, 98,000-square-foot former warehouse building at 247 W. Freshwater Way.

“It will be an extension of what’s going on here in the first building because we are literally filled up and cramming people in,” said Dean Amhaus, president and chief executive officer of The Water Council. “We realized we needed to continue to expand to meet the growth needs, so we’ve gone ahead with the purchase of that building on Florida.”

Scheduled to open in late summer or fall of 2016, the 46,600-square-foot building is located between the Brix Apartment Lofts development at 408 W. Florida St. and the 234 W. Florida St. office building. Amhaus said he estimates the building will require several millions of dollars in renovations.

Plans are still in the works for the building, but Amhaus said it may boast an open area called the Oasis, where companies can rent out space on a short-term basis.

“We’ve been getting a lot of interest globally from people who want to come here to be part of the cluster,” he said. “These are entities looking to get into the U.S. We would position Milwaukee as their landing zone to spread out across the rest of the country. A lot of these are small business entrepreneurs that don’t want a year-long commitment.”

In addition to new businesses, Amhaus said he anticipates tenants from the Global Water Center who are running out of space to move into the new building.

The building at 326-332 W. Florida St. has an assessed value of $693,000, according to city records. It was sold by Appleton-based U.S. Oil Co. Inc.

The $22 million project to create the Global Water Center was completed in 2013. The building provides office space, laboratories and other facilities for businesses, universities and start-up firms involved in water technology. Tenants in the global water center include Badger Meter Inc., A.O. Smith Corp., the corporate headquarters for Rexnord Corp., and the University of Wisconsin-Milwaukee School of Freshwater Sciences.

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Mayfair Collection adds discount J. Crew store
August 5, 2015 11:09 AM
HSA Commercial Real Estate has announced its latest addition to The Mayfair Collection in Wauwatosa: a discount J. Crew store called J. Crew Mercantile.

The store is just the second opened under J. Crew Group Inc.’s new Mercantile model. The first was at a shopping center in Dallas that also has a Nordstrom Rack, the off-price Nordstrom store brand that has proven popular at The Mayfair Collection.

The J. Crew Mercantile store will be located between makeup retailer Ulta and Men’s Wearhouse as the shopping center completes its final phase. Phase 1 of The Mayfair Collection included 270,000 square feet of retail space anchored by Nordstrom Rack, Dick’s Sporting Goods, Saks Fifth Avenue OFF 5th and opened in April 2014 on Burleigh Road just off Highway 45.

Construction on the Mercantile store will begin in August, and J. Crew expects it will open by year-end. J. Crew was represented by Dan Cohen of Mid-America Real Estate in cooperation with Nick Bruns of Open Realty Advisors.

“From the outset of this project, our strategy has always been to find best-in-class fashion brands that can attract customers throughout southeast Wisconsin,” said Tim Blum of HSA Commercial. “With this being J. Crew Mercantile’s second store in the country, we believe that we have further fulfilled that goal, and we are excited to have them as part of The Mayfair Collection.”

HSA Commercial broke ground on the second phase of the The Mayfair Collection in May. It will include a 45,150-square-foot Whole Foods store, a 140-room Hilton Homewood Suites hotel, a HomeGoods store and three Bartolotta restaurants, with a planned opening for Whole Foods early in 2016.

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Leases
August 5, 2015 10:34 AM

Anderson Commercial Group

Clear Shot Manufacturing has leased 8,800 square feet of space located at W185N11521 Whitney Drive in Germantown from Hennes Services, Inc.

OTR Wheel & Engineering, Inc. has leased 71,778 square feet of space located at 9153 Deerbrook Trail in Brown Deer.

Security Finance Corporation of Wisconsin has leased 2,500 square feet at West Bend Plaza located at 842 S. Main Street in West Bend from James E. Deshur.

Rising Phoenix Organic Market has leased 1,980 square feet at West Bend Plaza located at 830 S. Main Street in West Bend from James E. Deshur.

Luce Egg, LLC d.b.a. Tochi has leased 2,058 square feet at the RiverShores Development located at 705 Village Green Way, Ste 101B in West Bend, WI from Hendricks Commercial Properties.

Clothes Clinic Dry Cleaning, and More, LLC has leased 1,290 square feet located at 1017A S. Main Street in West Bend from ARM Management, LLC.

Dr. Michael Bardenwerper has leased 3,000 square feet located at 1116 N. Main Street in West Bend from RE Investment Properties, LLC.

RockTenn renewed their lease of 12,658 square feet at the Cedar Creek Business Center in Jackson.

Fitness Partners LLC d.b.a. Anytime Fitness has leased 5,320 square feet of space located at 1575 N. Water Street in Milwaukee from NEPI Retail LLC.

Colliers International|Wisconsin

Wuxi Asahi Composites leased 14,400 square feet of industrial space at 16225-16351 W Lincoln Ave. New Berlin.

Endless Autosport leased 7,800 square feet of industrial space at 10921-11111 West Mitchell St., West Allis.

Mid-America Real Estate
AT&T leased 2500 square feet at The Standard, 1920 E. North Ave., Milwaukee.

Homegoods leased 18,224 square feet at Lake Geneva Commons, 200 N. Edwards Blvd., Lake Geneva.

China Star Restaurant leased 1,950 square feet at Greenwood Shopping Center, 375 80th St., Kenosha.

NAI MLG Commercial

Laufenberg, Jassak & Laufenberg, S.C. leased 3,913 square feet of space at 115 S. 84th St., Milwaukee, from MLG Commercial.

Envoy Mortgage, Ltd. leased 2,172 square feet at 20300 Water Tower Blvd., Brookfield, from Janesville Associates, LLP.

RFP Commercial

Combined Marketing Inc. leased 12,550 square feet of space at 5101 W. State St., Milwaukee, from Kindberg Living Trust.

CDM Smith leased 2,255 SF at the Plaza East Office Center located at 330 E. Kilbourn Avenue in Downtown Milwaukee. Jeanine Sweeney & Ned Purtell represented the Landlord, Tishman Speyer.

Siegel-Gallagher

Opthalmology Associates S.C. leased 4,886 square feet of office space at 6020 S. Packard Ave., Cudahy, from C and D Holdings LLC.

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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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