Can Milwaukee's downtown rebound from the pandemic?
Real estate analysts are watching the next couple months closely
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Updated: 10:40 PM CDT Apr 1, 2021
Matt Smith
Real estate analysts are watching the next couple months closely
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Updated: 10:40 PM CDT Apr 1, 2021
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MATT -- WE WILL HAVE A FEW PRIVATE OFFICES HERE. MATT THIS IS A FIRST LOOK INSIDE : THE 12TH FLOOR OF THE NEW BMO TOWER DOWNTOWN. WHAT WILL WE BE STANDING AND WHEN THIS IS DONE? >> THE RECEPTION AREA. MATT THE BUILDING OPENED LAST : APRIL JUST AS THE PANDEMIC WAS RAGING. A YEAR LATER, A MAJORITY OF EMPLOYEES HAVE NEVER EVEN STEPPED FOOT INSIDE. AWAITING THEM IS ALREADY AN UPGRADED TOUCHLESS ENTRY AND NOW IRGENS, THE REAL ESTATE COMPANY THAT OWNS THE TOWER, IS ATTEMPTING SOMETHING IT’S NEVER DONE BEFORE. THIS IS PRIME REAL ESTATE. >> THIS IS SOME OF THE BEST SPACE IN THE BUILDIN MATT: BUILDING A POST-PANDEMIC OFFICE OF THE FUTURE, HOPING THE SAFETY INVESTMENTS AND DESIGN WILL LEAD TO A NEW LONG-TERM LEASE. WHILE COMPETING WITH OTHER OPEN SPACES DOWNTOWN. MATT: WHAT ARE SOME OF THE FEATURES THAT WOULDN’T HAVE BEEN IN SUCH A SPACE A YEAR AND A HALF AGO? >> IT WILL BE A LOT MORE DISTANCING BETWEEN WORK STATIONS. THERE’S GOING TO BE LIMITED COMMON SPACE. MATT IRGENS SAYS JUST UNDER 60% : OF THE BMO TOWER IS LEASED OUT. OVERALL, 2020 ENDED WITH AN 18% VACANCY RATE IN MILWAUKEE’ CENTRAL BUSINESS DISTRICT, A SLIGHT UPTICK FOR A CITY REAL ESTATE ANALYSTS SAY HAS WEATHERED THE PANDEMIC SO FAR. >> I THINK WE’LL SEE PEOPLE COMING BACK IN Q3 AND Q4 AND A THEY PLAN FOR 2022, THEY’LL BE MAKING THOSE DECISIONS BECAUSE RIGHT NOW WHAT THEY’VE DONE IS THEY’VE EXTENDED LEASES, THEY’VE CREATED SHORT-TERM LEASE OPPORTUNITIES, BUT THEY’RE NOT GOING TO MAKE ANY DECISIONS THAT THEY CAN’T GET OUT OF. MATT TRACY JOHNSON IS PRESIDENT : AND CEO OF THE OF THE COMMERCIAL ASSOCIATION OF REALTORS OF WISCONSIN, WHICH CLOSELY TRACKS THE TRENDS. THE INITIAL FEDERAL STIMULUS A PAYCHECK PROTECTION PROGRAM, SHE SAYS, KEPT COMPANIES AFLOAT , ALLOWING THEM TO CONTINUING PAYING RENT. >> WE HAVEN’T SEEN THE FALLOUT WE MAY HAVE BEEN EXPECTING THERE’S STILL A LOT OF RUNWAY TO GET TO THE END OF THIS, BUT WHAT WE WERE EXPECTING IN THE SHORT TERM IS NOT WHAT PLAYED OUT. MATT SOME COMPANIES, THOUGH, ARE : ALREADY PUTTING SPACE ON THE MARKET INCLUDING JOHNSON CONTROLS, MANPOWER GROUP AND NORTHWESTERN MUTUAL. AND THE YEAR ENDED WITH MORE SPACE VACATED THAN WAS BEING FILLED. JOHNSON SAYS ABOUT 25% OF THE DOWNTOWN WORKFORCE IS BACK I THE OFFICE, AND THE DESIRE IS TO BRING EMPLOYEES BACK BUT A LOT OF QUESTIONS REMAI THIS WEEK, THE MILWAUKEE DOWNTOWN BUSINESS IMPROVEMENT DISTRICT IS SURVEYING BUSINESS , ASKING WHEN AND IF THEIR EMPLOYEES WILL RETURN AND IF THEY WILL CONSIDERING REDUCING OR SELLING SPACE. WE HAVE ASKED THOSE QUESTIO IN OUR SURVEY AND WE HAVE ASKED THEM AGAIN. AND ULTIMATELY THERE’S BEEN A LOT OF SPECULATION AROUND WHAT’S GOING TO BE THE IMPACT OF THE OFFICE ENVIRONMENT AND REALLY THE RESPONSE THAT WE’RE GETTI FOR ONE, THE OFFICE ENVIRONMENT IS HERE TO STAY. MAP REAL ESTATE EXPERTS SAY THE : -- MATT: REAL ESTATE EXPERTS SAY THE SHORT-TERM HASN’T PRODUCED A MASS EXODUS. IT’S WHAT COMPANIES WILL DO IN THE FUTURE THAT COULD LEAD TO MULTI MILLION DOLLAR QUESTIONS. EXPERTS SAY MILWAUKEE HAS DONE BETTER THAN OTHER CITIES LIKE CHICAGO, FOR A NUMBER OF REASON. -- NUMBER OF REASONS. AND THERE’S ONE RETURN-TO-WORK TREND FORMING, SMALLER COMPANIES ARE BRINGING EMPLOYEES BACK AT A FASTER RATE. NATIONAL AND GLOBAL COMPANIE WITH OFFICES HERE ARE WAITING. IN MILWAUKEE, WISN 12 NEWS DERRICK: MATT TELLS US JUST THIS WEEK THAT MILWAUKEE TOOL ANNOUNCED PLANS TO EXPAND ITS OPERATIONS TO DOWNTOWN MILWAUKEE. OUR PARTNERS AT BIZ TIMES REPORT THE MOVE COULD BRING UP TO 2000 N