American Family Cancels Downtown Office Plan

American Family Insurance is citing the pandemic’s impact on workplace culture and a shift to remote work in announcing its cancelation of a 2019 plan to develop a downtown Milwaukee office for up to 400 employees.

It’s selling the five-story building at 1311-1325 N. Martin Luther King Jr. Dr. that it intended to redevelop.

“When the pandemic opened up options for how and where employees work, it meant American Family, like so many other companies, had to evaluate our real estate footprint and the space we need for the future,” said Kari Grasee, vice president of business and workplace services, in a press release. “We’ve since developed a plan for our real estate portfolio, based on careful consideration of many factors such as business and space needs, lease terms and current building use.”

The Madison-based insurance company paid $9.6 million for the 93,750-square-foot building in December 2019 as part of a joint venture with Van Buren Management. The plans called for adding floors to the top of the structure. American Family announced it was in the market for a Milwaukee office alongside its January 2019 announcement that it would take over the naming rights of Miller Park (now American Family Field).

Wednesday’s press release says the company, which has approximately 13,500 employees, could still lease office space in the future.

Unlike a number of other downtown office deals, including a pending agreement with Fiserv, there never was a city subsidy agreement formally proposed.

The insurance company previously leased office space in Pewaukee for a regional claims office. As of 2019, the office had approximately 300 employees, but by 2021 it was vacant amidst a shift to remote work and sold to Generac.

The building American Family is now selling has been subject to multiple redevelopment proposals. Prior to the Great Recession, it was considered for redevelopment into housing by New Land Enterprises. Van Buren Management, its owner before the insurance company, pursued tenants for the building for the past decade. Mandel Graphics, not related to the real estate development firm, occupied the building’s top floor before relocating to Glendale in 2011. Bucketworks, one of the city’s first coworking facilities, was located in the building while New Land pursued redevelopment. In 2014, Associated Bank developed a new branch to the south on a small site that was once part of the property.

The building was constructed in 1909 by an ice harvesting company and has had a number of different names and tenants over the ensuing century. Today it’s commonly referred to as the Mandel Graphics building, due to a painted sign on the south facade.

It is currently assessed for $2.3 million. The 0.26-acre parking lot, 1402 N. Vel R. Phillips Ave., that the insurance company acquired as part of buying the building is assessed for $134,400.

The press release says the insurance company explored donating the property to a nonprofit before opting to sell it. Similar to its downtown Madison office, American Family was planning to add a “DreamBank” facility for community events and community engagement in the building.

The insurance company said it remains committed to Milwaukee.

“During the past five years, American Family has entered into meaningful partnerships and made investments of more than $10 million in the city – from educational programs to small business support and healthy youth development – with having community impact in Wisconsin’s largest city among the company’s highest priorities,” said the company while emphasizing that the figure does not include its naming rights agreements for the Milwaukee Brewers stadium and the American Family Insurance Amphitheater at Summerfest.

“We continue to partner with key local organizations and Milwaukee-area universities and colleges to support youth and adults with gaining access to opportunities, with an emphasis on closing racial equity gaps while lifting and investing in community assets,” said Leana Nakielski, American Family director of community and social impact in Milwaukee. “We deeply value our partners and remain committed to driving positive societal impact well into the future.”

American Family reports being the country’s 13th largest property/casualty insurance group.

For more on the building, see our 2019 “What’s It Worth?” column.