Wisconsin Retail Review Summer 2019
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WISCONSIN RETAIL REVIEW SUMMER 2019 Wisconsin Edition, Summer 2019 MILWAUKEE’S FOOD & BEVERAGE INNOVATION Milwaukee has been growing at an unbelievable rate, and within the past couple of years there has truly been a downtown renaissance worth bearing witness. The city has done an excellent job of creating value, attracting jobs, and spurring development that has led to unprecedented economic and social revitalization. With both local and national headlines praising Foxconn, Amazon, Northwestern Mutual, and the Milwaukee Bucks, it is no wonder things have changed. While Milwaukee continues its quest to establish itself as the Great Lakes capital, the changes happening to its culture are what appear to have everyone on their feet. Between the East Side, Downtown, Historic Third Ward, Walker’s Point, and Bay View, there are so many cool concepts coming online, each of which showcases the unique character of the area it serves. From the Bucks Entertainment District to Zocalo food truck park, there is something different in just about every corner. It comes as no surprise much of the action is coming from the food and beverage segment, as Milwaukee is, after all, “Brew City.” One of these concepts is Crossroads Collective. Crossroads took occupancy in what was originally the Oriental Pharmacy, a 29-year staple of the Lower East Side, having served everything from cold medicine to deli sandwiches. While honoring the tradition of the original corner drug store/diner, Crossroads has taken an exciting approach in combating the increased pace of consumer demand by offering seven different food and beverage vendors within 7,000 square feet of retail space. While the model for this form of retail is less traditional, it is intruiging nonetheless and has unquestionably given this neighborhood a sense of identity. Curious to see all of these changes yourself? Hop on a Bird or Lime scooter, and within 30 minutes you will have experienced the unique character and offerings of Milwaukee. MILWAUKEE AREA ENTERTAINMENT CONCEPTS Entertainment concepts have been very active lately in the Metro Milwaukee Market. Axe throwing concepts, indoor golf simulators, Brookfield Square’s Whirlyball, and indoor amusement parks, such as Urban Air Adventure Park interested in opening in the former Gander Mountain box in Waukesha, have all begun to flood the market. Traditional retailers and QSRs have been much more selective in market positioning, with a strong appetite for A+ real estate. Urban Air Adventure Park | Photo Source Whirlyball | Photo Source Top Golf | Photo Source NOTABLE PROJECTS BAYSHORE TOWN CENTER REDEVELOPMENT GLENDALE, WI Bayshore Town Center is in the initial stages of a $75M Owner: Cypress Equities redevelopment to meet the demand for unique and experiential Mid-America Real Estate-Wisconsin, LLC retail and dining options for Milwaukee’s North Shore. The 52-acre redevelopment project will include demolishing the enclosed mall component, reducing the overall retail space from 830,000 SF to 523,000 SF, and relocating the tenants to the open-air lifestyle portion of the center. The plan calls for new uses, such as new luxury apartments on the northeastern portion of the project, first-rate hospitality concepts, medical services, and a rejuvenated Town Center square. Existing tenants include Apple, Trader Joe’s, Ulta, Devon Seafood CENTER VALLEY Grill, Cheesecake Factory, and more. APPLETON, WI Owner: Greene Development Mid-America Real Estate-Wisconsin, LLC Center Valley is a new retail development in Appleton off Interstate 41 with access on Wisconsin Avenue. This site sits just north of the Fox River Mall and is part of a super- regional trade area that serves as the primary shopping destination for central and northeastern Wisconsin in the Fox Valley. The development includes WG&R Furniture, At Home, REI Co-op, Kwik Trip, and multiple opportunities for small shop and dining concepts. Wisconsin Edition, Summer 2019 MILWAUKEE AREA RETAIL STATISTICS 12 mo deliveries in SF 12 mo net absorption in SF vacancy rate 12 mo rent growth 432 K (51.8 K) 4.3% -0.1% According to CoStar Group’s Retail Market Summary, Milwaukee’s retail market trends are traditionally influenced by the type of property and by demographic variables: “Growth in online sales, shifting consumer and retailer preferences and the bankruptcy of Toys R Us and Bon-Ton have created softness CURRENT QUARTER VACANCY RATE in the Power Center and Mall segments. There are nearly 40 spaces Malls 10.4% of over 25,000 SF available for lease within the Milwaukee market, Power Center 11.8% half of which are spaces over 50,000 SF. Given there is very limited Neighborhood Center 7.4% interest from traditional retailers for spaces so large, many landlords Strip Center 7.7% will likely turn to untraditional tenants in an effort to backfill this space. General Retail 2.1% While the big-box market is struggling, strong demand for single-tenant Other 15.1% net lease properties from both tenants and investors continues to be MARKET 4.3% a bright spot for the market. In addition, demand from restaurants, fitness centers, discount retailers and grocery stores have helped pushed vacancy lower this cycle. Vacancy is overall higher in the suburbs, where there is a much greater concentration of big-box retail.” Net absorption, net deliveries, and vacancy “In addition, there has been bifurcation by geographic location as growing trendy city neighborhoods in the East Side, downtown, and in the Third Ward are seeing stronger retail performance. However, the areas with the highest buying power (number of households multiplied by median household income) are typically concentrated outside of Milwaukee in the wealthy North Shore suburbs of Whitefish Bay and Mequon, or in west suburban Elm Grove, Brookfield, and the lake region of Waukesha County.” Source: CoStar Group Wisconsin Edition, Summer 2019 MID-AMERICA WISCONSIN MARKET TRANSACTIONS + ASSIGNMENTS Tenant Location Size Brokers Adam Dreier and Tony Colvin represented Planet Fitness. Main Street Planet Fitness 3.52 Acres Fred Stallé represented Woodman’s Food Market (land Waukesha, WI seller). County Hwy Q Hy-Vee 28.8 Acres Dan Cohen and Max Jacobson represented Hy-Vee. Waunakee, WI Taylor Drive Dan Cohen and Joe Kleiman represented Panera Bread. Panera Bread 1.7 Acres Sheboygan, WI Dan Rosenfeld represented the land owner. Green Bay Road Burlington 45,302 SF Adam Dreier represented the tenant. Racine, WI Mineral Point Road Chipotle 3,000 SF Adam Dreier represented the tenant. Madison, WI Green Bay Road Giordano’s 4,500 SF Adam Dreier represented the tenant. Kenosha, WI TENANT HIGHLIGHT SHOPKO OPTICAL 12 LOCATIONS Mid-America Real Estate-Wisconsin, LLC assisted Shopko Optical in their optical store relocation program. Tony Colvin and Adam Dreier have assisted Shopko Optical, headquartered in Green Bay, WI, in securing 12 new locations in Wisconsin. MID-AMERICA HAPPENINGS SUMMER FUN & TEAM BUILDING Recently, the Mid-America-Wisconsin office has been extremely active! In the middle of July, the Wisconsin office took on the Associated Bank Storm the Bastille 5K run/walk, an annual event that kicks off Milwaukee’s Bastille Days festival. The event, which leads runners through the streets of downtown Milwaukee, is followed by music and enjoyment of some of the city’s finest beverages. As part of a Mid-America annual tradition, one member of the office accepts the challenge of running the race in a full suit and tie and becomes known as “Suit Guy.” Storm the Bastille 5K Walk/Run A few short weeks later, the Wisconsin office hosted an internal volleyball tournament at Fat Daddy’s in Milwaukee’s Historic Walker’s Point neighborhood, a bar which has become a destination for volleyball enthusiasts with its three outdoor sand courts and 23 rotating taps. The Mid-America teams had no problem warming up, as the day - and the sand, as a result - was a scorcher. After a few hours of intense battle, a champion team emerged. All in all, it was a fun day filled with teamwork, competition, and laughter. Volleyball at Fat Daddy’s Wisconsin Edition, Summer 2019 IN THE NEWS Milwaukee Brewers Ryan Braun and Christian Yelich are new investors in downtown’s The Avenue redevelopment | Milwaukee Journal Sentinel Glendale approves financing plan for Bayshore redevelopment | Biztimes: Milwaukee Business News Bringing the Milwaukee Athletic Club into the 21st Century | Milwaukee Business Journal $3.9M in street projects to better link downtown and Third Ward advance | Milwaukee Business Journal Shopko Optical on track to move 81 eye care centers by early November | Milwaukee Journal Sentinel HKS, Concord developing Wisconsin Renaissance | Hotel Management OUR SERVICES TENANT REPRESENTATION PROJECT LEASING INVESTMENT SALES NET LEASE SALES ASSET MANAGEMENT SURPLUS PROPERTY DISPOSITION LAND BROKERAGE DEVELOPMENT & CONSTRUCTION MANAGEMENT MidAmericaGrp.com Illinois | Michigan | Minnesota | Wisconsin.