The office real estate market has undoubtedly been hit in the midst of the COVID-19 pandemic. Many employees weren’t even in the office, and few companies thought about purchasing a new one. Many tenants who …
Office The real estate market has undoubtedly been hit in the midst of the COVID-19 pandemic. Many employees weren’t even in the office, and few companies thought about buying a new one. Many tenants who may have moved or modernized their premises during normal times opted for short-term lease renewals in the face of uncertainty instead.
Now with massive vaccinations and a recovering economy, there are signs of life in the office market. Industry professionals say the situation should only get better in the coming months.
“I think we’re going to catch up with last year and we will do it this year,” said Jenna Maguire, an office broker at Founders 3 in Milwaukee. “I think the interest will continue … to cross the border. I really don’t think we have such “office space is redundant or unnecessary, everyone will work from home.” It just won’t happen. “
Perhaps the biggest office deal during last year’s pandemic was Kahler Slater’s announcement of a move to the new BMO tower in the city center.
The industry had a lot to celebrate this year. The headliner is Brookfield-based Milwaukee Tool, which announced in the spring that it plans to expand its operations in downtown Milwaukee.
And three companies announced in the same week at the end of June that they are opening or relocating their local offices. Church Mutual Insurance Co. from Merrill said it rents 10,000 square feet in the 833 East building in the city center. New York-based law firm Wilson Elser said it has moved its local office to Cathedral Place in downtown. Chicago-based Sikich announced that it will move its Brookfield office to the development of The Corridor.
Maguire, who primarily represents landlords in rental deals, said she can keep an eye on the office market for the number of property tours she runs on Friday afternoons during the summer. The many tours in those days indicate a strong market.
She said she had been busy the last few Fridays. Areas of greatest interest include Westown, Walker Point, and the Historic Third District. Most of the users currently active in the market are regional or Wisconsin companies, she said.
“Church Mutual views the office environment as a way to create a culture, train new employees and hire new employees,” said Kevin Root, senior vice president of operations.
“We really believe that our employees should be in the office,” he said. “We are currently working on it and are pinning down exactly what it means, but we do see a lot of benefits in having employees in the office, even if it doesn’t have to be on a permanent basis.”
All of these employers indicated that their new office space would reflect a more flexible workplace. Sikich and Wilson Elser said their offices will use a hotel system in which employees will reserve jobs prior to arrival. There will also be more space for collaboration.
Ruth said Church Mutual is still finalizing details for its Milwaukee office, but it will reflect the same principles. He said there aren’t many hard-walled office spaces that “should foster greater collaboration.”
Maguire said companies are looking at creating more flexible environments as part of an effort to bring workers back to the office.
“Many companies are referring to a hybrid work model and / or a certain percentage of their office that will be virtual,” she said. “But definitely the idea of having more space for collaboration, space for distribution and / and convenience was really critical in making a lot of decisions.”
Office and market activity coincides with the general resuscitation of the region. Vaccinations are readily available and many people feel safe when they gather in large crowds. This is evidenced by Bucks fans packing the Deer District during the playoff games. What’s more, a recent survey of employers in downtown Milwaukee found workers returned to their downtown offices faster than many other metro areas.
Lyle Landowski, Managing Director, Colliers International | Wisconsin said the momentum Milwaukee had before the pandemic began to return. The Milwaukee Tool expansion and other major projects such as The Couture high-rise on the city’s waterfront could attract the attention of more investors and office users.
He said the Milwaukee Tool was a “powerful shot in the hand” for the market. When a company the size of Milwaukee Tool demonstrates its confidence in city success, it sends a strong signal to others.
“We’ve lost a bit of momentum due to COVID, but I think people are starting to wake up to the fact that we have a beautiful city center and infrastructure, we have a very stable economy and we are experiencing a slight upgrade, especially as our producers are becoming technology companies, ”Landowski said. “I think our market fundamentals will be very attractive to both corporate users and real estate investors.”