Is the Downtown Apartment Boom Over?
Wangard hesitates over river-side apartment complex, while other projects push ahead.
Brady and Water. Rendering by AG Architecture.
Wangard Partners went before the City of Milwaukee Board of Zoning Appeals Thursday seeking changes to a long-planned project for the city’s greater downtown area.
Milwaukee Business Journal reporter Sean Ryan covered the meeting, the details of which may have implications for the city’s housing market.
The property Wangard plans to develop is a piece of land near the Brady and Water Street intersection (1693, 1701-1729 N. Water St.), with access to the Milwaukee River, just outside the boundaries of Downtown, that’s been vacant for years. Ryan reported that Wangard initially planned apartments there, but now has plans for condominiums.
Ryan reported that Michael Cockroft, a project manager for Wangard, said the firm re-evaluated their plans in light of changing markets for housing downtown. Apparently the market for high-end apartments downtown is starting to look saturated as vacancy rates rise. And Cockroft said those looking downtown are increasingly interested in owning a home downtown, thus, the condos.
Is this the end of the apartment boom downtown? Wangard appears to be signaling that. Apartment developments are still occurring Downtown, and in big ways. Look at Northwestern Mutual’s 7Seventy7 tower rising out of the ground. And the boom has certainly metastasized in other parts of the city like Walker’s Point and Bay View.
But if a major developer like Wangard is already hesitant about the apartment market, what does that mean for those projects that have yet to cut a ribbon? That could be worrisome… except that other apartment projects are still going strong.
Renderings:
Four Apartment Projects Make the News
In the Third Ward, East Town, Riverwest, Westown, four apartment projects have made news this week, three of them very close to Downtown.
In Westown, a project that would see 35 apartments made it through the Historic Preservation Commission, Jeramey Jannene reported. The development at St. James Episcopal Church at 833 W. Wisconsin Ave. stalled in the committee in February because the project calls for demolishing a parish house built in 1899 to make way for the development of an event center and apartments. The project passed this week, with the developer Josh Jeffers agreeing to preserve some of the elements of the historic building.
In the Third Ward, an early 20th century building at 203 N. Broadway is being redeveloped into seven apartments with commercial space on the first floor, Michael Horne reported. The four-story building is the former home of Paintball Dave’s.
In East Town, the Park East Hotel is being redeveloped into a 96-unit apartment building. The building at 916 E. State St. was purchased for $9 million and is being redeveloped by a team of developers including Michael Klein, Jeno Cataldo and Derek Schneider.
In Riverwest, developer Scott Genke unveiled some preliminary plans for a boutique, eight-unit apartment development on Humboldt Boulevard, just south of Gordon Park.
Downer Avenue Switcheroo
Tom Daykin of the Milwaukee Journal Sentinel reported Friday that Optix on Downer, an eyewear retailer, will move a block south and occupy a larger, now vacant space.
Einstein Bros bagels formerly occupied the spot Optix will now occupy. It’s been vacant for years. Optix will leave behind a smaller space next to Downer Wine & Spirits. Which in turn is next to the future home of a Stone Creek Coffee; that firm is also moving into a formerly long vacant building.
So Downer is filling up, or so it seems. Optix is moving into a bigger space, and hopefully something new will take its place at the north end of the commercial strip there.
Still, despite being located in the wealthiest area of the city, the little commercial strip has struggled for years with vacant storefronts. In 2014, Bruce Murphy wrote about a prominent property owner in the area calling for public financing in the form of a Tax Incremental District to spur growth.
But as Murphy and Michael Horne have written, the issues Downer has faced over the years are the consequence of intractable property owners, not a weak local market, nor a need for subsidies.
In Other News:
- Developers of the Sherman Phoenix, a business incubator for local entrepreneurs in Sherman Park, have reached about 70 percent of their fundraising goal for the project.
- Walnut Way Conservation Corp. was awarded grants for solar energy projects in Lindsay Heights.
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Plats and Parcels
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New Third Ward Tower Will Be Milwaukee’s Priciest
Mar 3rd, 2024 by Jeramey Jannene
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New Corporate Headquarters, 130 Jobs For Downtown
Feb 25th, 2024 by Jeramey Jannene
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A Four-Way Preservation Fight Over Wisconsin Avenue
Feb 18th, 2024 by Jeramey Jannene
Kind of a nitpick, but doesn’t metastasize mean the spread of destruction?
I love seeing stuff like this. Of course the downtown apartment market is over-saturated, these greedy developers are sadly mistaken if they think everyone in this city wants to pay $1500 for a single bedroom apartment, before including parking/internet/utilities…think of what you can buy for that type of monthly payment. Hopefully this will compress some apartment pricing downtown and make it more affordable for those wanting to live there and contribute to the local economy and not spend a ridiculous amount of their income on rent.
It’s becoming ever more clear that the market is softening and enthusiasm is waning, in Milwaukee and elsewhere, and not just related to real estate.
I’ve taken the great influx in rental development in recent years as a sign of a strong economy. Why would developers build condos when they could profit so much from building and owning rentals? And, many markets (Chicago!) had way too many condos completed and in construction at the time the real estate bubble burst. If this means building more condos that the market can bear, then I’m all for it. And, I guess it may just be a downtown thing.
That said, I doubt that half the rental projects yet to break ground will actually do that. Hoping Barrett Lo gets the Couture up without too many changes. Their current rebidding of the project’s general contractor is an admission that project costs are a concern right now. The quick announcement of NML’s new 7Seventy7 may have caused Barrett some pause. Didn’t Mandel just nix plans for a luxury tower on Prospect Ave., too?
Will one of you please start calling these developers out? Marcus, JCI and Barrett. They are all sitting on some hot properties and yet nothing is happening. No one is saying anything. Build or get off the spot! What is the word?
The maybe scary, or wonderful thing might be when actual sales data starts to impact values in the area. Although these might be sold as condos, many of them will likely be rented out- don’t know how condo values spread to apartments in such a way.
mbradleyc, are you advocating the seizure of private property through eminent domain or other means?
I kind of think my neighbor is under utilizing their backyard, so I’m going to take it from them because I can use it better. Great idea!
Better yet, why don’y you by some property to develop if you know better than them!
The developers take great risks building these buildings. No doubt the current apartments/condos when finished need to get filled before more will will be built. All about supply and demand. In the long run the more people who move downtown the better it becomes.
@LG “The developers take great risks building these buildings.”
No they don’t.
Most developers are property vultures. They buy up property and sit and wait for the area around it to improve before ever coming in to build or redevelop. When the area becomes safe, they then get all sorts of free money the average property owner can never get. At the end of the year the developers then have a ceremonial banquet to pat themselves on the back and hand out awards.
The people taking all the risks are the ones owning homes a/o small business.
They wait until the current batch of apartments fills up. Then when people want something new they build more.
Of course they want the city to help. The city is happy to do it for the right property, as it should be. It takes money to make money. Then when the building is complete the area gets better and the city has a valuable property on its take rolls.
Yep, no risk.
Developers and the city take risks when they put together a deal. Calculated risks to minimize failure. If it works right everyone wins. That’s not always the case but when it goods well, and it usually does, it make the city a better place.