Chicago CRE execs say Milwaukee market well positioned to handle economic headwinds

Chicago resident Thomas D’Arcy, chief operating officer of Houston-based Hines, speaks about the benefits of Milwaukee as a city during BizTimes Media’s annual commercial real estate conference Thursday. (Maredithe Meyer/BizTimes)

With an economic future clouded by inflation, supply chain problems and the possibility of a recession, commercial real estate professionals around the world could be excused if they aren’t feeling uneasy, then perhaps less confident than they did at the end of 2021, when the lifting of the crisis did Most of the pandemic restrictions fueled optimism about a return to office, retail and entertainment facilities.

A survey by the Commercial Association of Realtors Wisconsin (CARW) confirms this: 65.5% of surveyed members said the current commercial real estate market is “flat,” compared to 28% who said it a year ago and 15.5% said the market was “weak,” down from just 3% a year ago. Only 19% of CARW members surveyed this year describe the market as “improving,” up from 69% a year ago.

Despite local commercial agents’ concerns about the market, Chicago real estate investors and developers speaking at BizTimes Media’s annual commercial real estate and development conference on Thursday said Brew City is well positioned to weather any storms that may approach.

For Thomas D’Arcy, senior managing director at Hines, which is developing a 31-story apartment tower along the river at 333 N. Water St. in the Third Ward, it’s the city’s quality of life and short commutes that encourages employers to invest have office projects like Fiserv’s plans to move to downtown Milwaukee.

“I’ve worked on projects in most major Midwestern cities, and the great thing about Milwaukee — which doesn’t have any of those other cities — is that it’s physically connected to Chicago,” said D’arcy, who is based in Hines Chicago Houston works office and lives on the north shore of the city.

That advantage has less to do with Chicago being a hub and more to do with Milwaukee’s ability to capitalize on its location in a “mega-region,” he said, and its ability to differentiate itself from the city of big shoulders.

“Milwaukee has many, if not all, of the problems that Chicago has, but on a much smaller scale. It has all the cultural aspects of a city like Chicago but is just so much more livable. And I think Milwaukee will continue to be a benefactor of migration from Chicago,” D’Arcy said.

For Tony Lindsay, director of asset management at North Wells Capital, LLC, part of Milwaukee’s appeal was that city officials were keen to work with developers and employers to rethink places like the once downtrodden but now booming Westtown neighborhood and provide a roadmap for growth . That’s one of the reasons the company bought BonTon’s former headquarters in 2017, which Fiserv will be relocating to, he said.

“The reality is, we invested in this building because we liked the Westown story,” Lindsay said. “We had no idea what was going to happen, but we knew the idea of ​​this public-private partnership was real – that you could call the city and someone would answer the phone and talk to you. A lot of exciting things have happened because of this public-private partnership.”

Office developments like the Fiserv deal and the new downtown Milwaukee Tool office not only encourage office building developers, they’re great news for developers working on nearby housing projects, D’Arcy said.

“(These office tenants) are – from the (perspective) of a housing developer – simply worth their weight in gold. These are people who will be spending time downtown, and some of them will be staying in our building.”

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