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HEARTLAND SNAPSHOT, JANUARY 2008
Milwaukee Industrial Market
The biggest trend in Milwaukee’s industrial sector is the return of manufacturing. Due to the cheap dollar, American products are better able to compete globally and attract overseas buyers for what they perceive as a quality inexpensive product that is “made in the USA”. What other sectors perceive as a downtown is something that is actually helping the industrial sector of the economy.
The Menomonee Valley Redevelopment is a by-product of this new level of optimism. Located at a former rail yard five miles west of Downtown Milwaukee, the approximately 90-acre project will be redeveloped as a cutting edge business park. It is being sponsored by The Menomonee Valley Redevelopment Authority, a public/private partnership, to retain and attract manufacturing businesses and employment. Three significant announcements have been made so far. Palermo Pizza has built an approximately 100,000-square-foot facility to manufacture frozen pizzas. Derse Sign Co. has announced plans to build a 200,000-square-foot plant. Finally, Charter Wire is in discussions with the City of Milwaukee and the Authority to relocate their plant from the Summerfest Grounds to a sizable site in the development.
The other area seeing activity is the Interstate 94 corridor between Milwaukee and the Illinois state line. Many developers and industrial companies view this corridor as a large infill site for the growth coming from northern Illinois, and several companies have set up shop in the area, including Johnson Wax’s 600,000-square-foot facility in Racine and Rust-Oleum’s recent leasing of 600,000 square feet in Kenosha (for more on this transaction, see sidebar). Pannatoni has also constructed a 600,000-square-foot speculative building just east of Highway 50 in Kenosha.
The vacancy rate for the market as a whole continues to fall to approximately 7.5 percent, approximately 200 basis points lower than two years ago, according to more conservative estimates. Rental rates for the market are averaging $4.74 per square foot for warehouse space and $9 per square foot for flex space.
As a whole, the industrial market appears to be gaining strength compared to previous 24 months. If the economy holds, the outlook should be very bright for manufacturing in Milwaukee.
Roger Siegel is an executive vice president at the Milwaukee office of CB Richard Ellis.
FIRST INDUSTRIAL DEVELOPS BUILD-TO-SUIT IN KENOSHA
Chicago-based First Industrial Realty Trust is developing a build-to-suit facility for Rust-Oleum Corp. The 600,000-square-foot distribution center is underway within the REIT’s 169-acre First Park Kenosha industrial park in Kenosha, Wisconsin. The facility, located at the corner of State Route 158 and 88th Avenue, will anchor First Park Kenosha, and will feature expansion capacity up to 850,000 square feet. Completion scheduled to occur in the fourth quarter.
— Coleman Wood |
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