If you’ve ever wondered who’s in that office tower you keep walking by, or what’s under construction in your neighborhood, we’re here to help catch you up.
Developing Stories is our new monthly series covering commercial real estate in southeastern Wisconsin. Every month, Milwaukee Business Journal reporter Addison Lathers joins Lake Effect’s Sam Woods to discuss top headlines from the previous month, and what she’s expecting in the future.
The month, the two discuss stories involving nine-figure deals and an auction whose winner remains a mystery.
This conversation has been edited for length and clarity.
Lake Effect's Sam Woods: We've got a fresh slate of three new commercial development stories to recap, including some big sales. So what's first?
Addison Lathers: In September I broke the news that Mandel Group, the real estate firm behind some of the most iconic apartment condo buildings in Milwaukee and the suburbs, is merging with company out of Nevada in a deal valued at over $600 million. You may know Mandel Group from buildings like the University Club Tower — the big high rise with beautiful views of Lake Michigan. Maybe more familiar to the rest of us that aren't millionaires is the North End apartment complex — a sprawling apartment complex at Pleasant and Water Street that's home to Fresh Thyme Market. On the other side of the deal is Cottonwood Communities, and they're just a huge company. They have apartment buildings pretty much across the nation, although they're really well known in the West and the South, they've recently began to expand into the Midwest.
The second story is about the sale of the former Master Lock site via auction, though we're actually not going to know who was behind the winning bid for months, maybe more than a year. The CEO of the company that conducted the auction told me it was a challenging site to market like from the get-go, because of the politics of how Master Lock exit Milwaukee and the jobs that got taken away, but also because it's in a residential area. That'll put some limits on what the property there could be used for. As for who actually made the bid, we'll have to wait. The buyer could make an announcement or maybe we won't even find out until the deed is filed with the county.
Third we have an update from last month. Developer Josh Jeffers did indeed reach a deal with his lender to save the Mackie building, so no foreclosure sale will be needed for one of downtown's best-known historic buildings. As a reminder, the complaint alleged that the company Jeffers leads defaulted on a loan. But that suit has since been dismissed and Jeffers told me that he and his bank have reached a kind of agreement to reinstate the loan. He expects the building to get some upgrades next year and a new agreement with Bartolotta Restaurant Group, which operates the building's event space, is in the works. So hopefully those things will bring some new action and some new revenue to the building.
Every month we highlight a word or phrase that showed up in your reporting. So what's this month's word and how did it come across your desk?
RFP. It stands for 'request for proposal.' Government bodies use them to attract interest in tricky properties or projects, and they usually advertise a discounted sales price or other incentives. Through this process, Waukesha County just selected Milwaukee developer F Street to buy the former University of Wisconsin Milwaukee satellite campus. It plans to build about 650 homes there, from single family houses to, multi-family apartments. And these kinds of huge, honestly transformational redevelopments are usually only possible these days through some kind of public assistance or partnership. Many of which, like this one, start with an RFP.
To close us out, is there anything you're keeping your eye on for the future?
Milwaukee County Circuit Court Judge JD Watts has officially signed an order allowing foreclosure proceedings on the stalled Edison site by the Marcus Performing Arts Center to begin. Some Great Depression-era laws that are still around mean that the developer has a chance to pay up before the sale occurs. They could have about three to six months to settle, attorneys tell me, and then the property will head to auction as long as no one declares bankruptcy. Bankruptcy will stop everything. But if bankruptcy doesn't happen and the auction does proceed, maybe by the end of the year, we could finally see action at the stalled construction site, which has been quiet since the developer Neutral ran out of money and stopped paying its construction crew last September. If anyone listening wants to read more about how foreclosure works on a construction site with a lien on it, I wrote a piece recently for the Business Journal about it.
