Q4 2014 | INVESTMENT SALES
COLLIERS INTERNATIONAL | WISCONSIN
Investment Sales
Market Report
2014 Year in Review: Top 10
Wisconsin Investment Deals
MARKET INDICATORS
Q4 ‘14 Q1 ’15*
OFFICE ABSORPTION (SF)
53,812
OFFICE VACANCY
18.7%
INDUSTRIAL ABSORPTION (SF) 1,722,543
INDUSTRIAL VACANCY
RETAIL ABSORPTION (SF)
5.31%
333,338
RETAIL VACANCY
6.6%
MULTI-FAMILY DEMAND (Units)
-753
MULTI-FAMILY VACANCY
3.6%
*Projected
Sources: Colliers | Wisconsin, CoStar, Xceligent, MPF Research
ECONOMIC INDICATORS
QoQ
YoY
1. 411 E Wisconsin Ave
“411” is a 30 story high rise offer tower in the heart of
downtown Milwaukee anchored by major law firms Quarles
& Brady, LLP and von Briesen & Roper S.C. It sold in May
of 2014 to Five Mile Capital Partners, an asset management
company based in Stamford, Connecticut. Riverview Realty
Partners, a wholly owned affiliate of Five Mile Capital
Partners, is the Chicago-based group that will operate the
property. 411 provides its tenants with numerous amenities
including a 23,000 SF high class fitness facility operated by
the Wisconsin Athletic Club, technology-equipped
conference facilities, an on-site restaurant and one of the
best parking ramps in downtown. The 654,154 square foot
building traded for $74.3M ($93.84 PSF). NNN 411 East
Wisconsin, LLC (Thompson National Properties), a tenantin-common investor group, sold the property at a steep
discount after purchasing it for $95M ($145.22 PSF) in
April of 2005. The 2014 transaction involved the
assumption of an approximately $66M CMBS loan, and the
going-in cap rate equated to 7.94%. Five Mile plans to
complete $17.5M of renovations to the property.
METRO MKE UNEMPLOYMENT
5.2%
WI UNEMPLOYMENT
5.4%
MIDWEST UNEMPLOYMENT
5.4%
2. Midtown Shopping Center
US UNEMPLOYMENT
5.6%
In 2001, a joint venture of the Canyon-Johnson Urban Fund and local developer Boulder Venture
purchased the blighted Capitol Court Shopping Center, and immediately targeted it for demolition
and redevelopment. Within a couple of years they lined up an impressive roster of tenants including
Wal-Mart, Pick 'n Save, A.J. Wright, Footlocker, T-Mobile, Cousins Subs, Starbucks, Applebee's and
Pizza Hut. The development created 500 jobs and Midtown was considered the largest and
possibly the most successful inner city retail redevelopment in Milwaukee’s history. In 2005, the
developer sold the project to The Inland Real Estate Group of Companies, Inc. a REIT out of Oak
Brook, Illinois. On April 2, 2014, Inland sold the 408,499 SF project to DLC Management Corp
(Tarrytown, NY) for $47.15M. The deal included twelve 92% occupied retail buildings, a 0.73 acre
outlot and a 157,793 SF Wal-Mart ground lease.
METRO MILWAUKEE OFFICE JOBS
US GROSS DOMESTIC PRODUCT
187,730
5.0%
Sources: Bureau of Labor Statistics, Bureau of Economic Analysis
www.colliers.com/wisconsin
411 E Wisconsin Avenue – Milwaukee, WI
Colliers International | P. 1
MARKET REPORT | Q4 2014 | INVESTMENT SALES | WISCONSIN
The Shops of Grand Avenue– Milwaukee, WI
3. The Shops of Grand Avenue
Grand Avenue makes our list at #3 not because of its dollar value, but due to its notoriety as a polarizing hot stove topic for development in Milwaukee.
In the fall of 2014, the special servicer to the loan, CW Capital, placed the property on the auction block. A group of sophisticated local investors
surfaced and gained a lot of press as a potential front runner to purchase the property. However, in November the transaction was sold to Alex Levin
out of Brooklyn, NY, a relatively unknown investor to Milwaukeeans. Levin paid $16.5M ($56.20 PSF) for the struggling 293,596 SF downtown mall
that had previously traded for $31.65M in 2005. The buyer’s development plan has not been finalized. The highest and best use will most likely
involve a mix of housing, retail and office tenants.
4. Ace Industrial Portfolio
On June 24, 2014, Crosslake Partners (Rosemont, IL) purchased 12 value-add industrial buildings totaling 1.12M SF in a portfolio from Centerpoint
Properties (Oak Brook, IL). The price was $27,308,315 ($24.33 PSF). The deal is not a cap rate deal due to the high vacancy rate at the time of sale
(occupancy of 63%). The investor has plans to rebrand and reposition the buildings by emphasizing their strong access to the freeway system and
airport. Similar to sales ranked #1 through #3 in this report, the Ace transaction was a “short” from a previous sale. At the peak of the market in
2007, Centerpoint had paid $46.9M ($48.50/SF) for this portfolio.
5. Rockwell Automation
In March of 2014, KTR Capital Partners (New York, NY) sold 6400 W. Enterprise, Mequon, Wisconsin, a 559,121 square foot, three building campus on
47.5 acres, to Founders Properties, LLC (Minnetonka, MN). KTR had previously acquired the property in 2011 as a part of a 31 building transaction. The
Rockwell campus sold for $32.37M ($57.90 PSF) on a 10 year lease with a going in cap rate of 6.5%. This deal resets the cap rate floor for credit
industrial sales in Wisconsin.
6. FedEx SmartPost Headquarters
In late 2013, FedEx SmartPost, Inc. announced they would move their Milwaukee headquarters to Brookfield
Lakes Corporate Center XI, which had sat vacant since 2010. After FedEx signed a 10 year lease deal,
Hammes Company (Brookfield, WI) immediately sold the 79,228 SF building to New York-based Sentinel
Real Estate Corporation. Sentinel acquired it for $16.75M ($211 PSF) at a 7.00% cap rate. This single tenant
net leased deal set the market for credit office investment sales is one of the most significant office
transactions since the recession.
FedEx SmartPost Headquarters – Brookfield, WI
7. The Franklin Apartments
The Franklin Apartments were sold in mid-2014 in a deal that changed hands between two of Milwaukee’s largest landlords. Metropolitan Associates
acquired the 114-unit apartment community from Fiduciary Real Estate Development for $21.5M or $193,860 per unit at a 6.00% cap rate. The
apartments, located on Milwaukee’s Eastside one block from Lake Michigan, were 97% occupied at the time of sale. The unit mix consists of two
bedroom/two bathroom and one bedroom/one bathroom units with rents ranging from $1,275 to over $2,000. Amenities include a newly renovated
clubroom, fitness and business centers, concierge, heated garage parking and a terrace with gas fire pit.
continued on page 4…
$400
$1,000
$350
$900
$400
$300
Total Dollar Volume
$178
$212
$202
$500
$122
$83
$700
$600
$237
$203
$254
$145
$228
$217
$165
$92
$104
$119
$113
$50
$106
$100
$78
$176
$150
$220
$200
$236
$250
$800
$349
$309
$300
$88
Property Type Specific Dollar Volume
HISTORICAL INVESTMENT SALES DOLLAR VOLUME
$200
$100
$0
$0
2009
2010
2011
Total
Industrial
2012
Office
Retail
2013
2014
Multi-Family
Includes all $500,000+ arms length investment sales in Milwaukee, Waukesha, Ozaukee, Washington, Racine and Kenosha Counties. All dollar values in millions.
Sources: Colliers | Wisconsin, CoStar
Colliers International | P. 2
MARKET REPORT | Q4 2014 | INVESTMENT SALES | WISCONSIN
NOTABLE RECENT INVESTMENT SALE ACTIVITY
INDUSTRIAL SALES
BUILDING
CITY
BUYER
SELLER
SALE DATE
PRICE
PRICE PSF
Staples Distribution Facility
Oak Creek
Exeter Property Group
W180 N11900 River Ln
Germantown
STAG Industrial Management
13900 S Grandview Pkwy
Sturtevant
Continental Business Center
Menomonee Falls
N50 W13775 Overview Dr
Philip Markiewicz
9/2/2014
$17,000,000
$60.75
7.29%
Icahn Enterprises
11/11/2014
$9,300,000
$45.93
Undisclosed
STAG Industrial Management
Joseph & Cynthia Kaplan
10/22/2014
$6,195,000
$63.12
Undisclosed
Hendricks Commercial Properties
Ziegler Bence Development
9/9/2014
$4,500,000
$66.94
9.00%
Menomonee Falls
HSA Commercial
Coastal Partners, LLC
10/17/2014
$4,310,000
$60.96
Undisclosed
Franklin Commerce Center
Franklin
Cam Franklin LLC
Biynah Industrial Partners &
Alex Brown Realty, Inc
9/4/2014
$4,100,000
$51.15
Undisclosed
Lincoln Avenue Business Center
West Allis
Outlook Development Group
4 S LLC
12/5/2014
$1,100,000
$51.16
Undisclosed
New Berlin
Race Investments LLC
James Young (Zilber Property
Group)
12/10/2014
$2,100,000
$61.39
Undisclosed
BUILDING
CITY
BUYER
SELLER
SALE DATE
PRICE
PRICE PSF
ACTUAL CAP
US Cellular – American Center
Madison
Joseph Haim
Alex Brown Realty & Fulcrum
Asset Advisors
12/11/2014
$13,100,000
$128.78
9.10%
API Healthcare Corp
Hartford
Capital Square Holdings, LLC
KBS Construction, Inc.
9/25/2014
$13,000,000
$176.26
7.67%
4202 W Oakwood Park Ct
Franklin
American Realty Capital Trust II
Aurora Health Care
12/1/2014
$11,300,000
$224.09
Undisclosed
The Tannery
Milwaukee
Sara Investment Real Estate
LCM Funds
10/31/2014
$16,277,386
$62.52
Undisclosed
Hal Leonard HQ Sale/Leaseback
Milwaukee
Broadstone Real Estate
Hal Leonard Corporation
12/29/2014
$6,821,702
$200.31
7.23%
Batteries Plus HQ
Hartland
Central Property, LLC
PDC Facilities, Inc
8/11/2014
$3,850,000
$127.25
8.05%
Park Place VII – Horizon
Milwaukee
Michael Plainse
Greenfield Partners
8/29/2014
$3,500,000
$101.26
Undisclosed
BUILDING
CITY
BUYER
SELLER
SALE DATE
PRICE
PRICE PSF
ACTUAL CAP
Prairie Ridge Portfolio
Pleasant Prairie
Inland Real Estate Income Trust
Kite Realty Group Trust
12/15/2014
$32,527,300
$139.71
Undisclosed
Gander Mountain
Waukesha
ARC Properties
Inland Private Capital Corp
9/29/2014
$18,275,353
$274.61
8.35%
*The Shops of Grand Avenue
Milwaukee
Alex Levin
CWCapital Asset Management
11/19/2014
$16,500,000
$56.20
N/A
7000 S 76th St
Franklin
Bank Realty LP
Bartels Management Services
8/29/2014
$5,100,000
$329.90
7.47%
BUILDING
CITY
BUYER
SELLER
SALE DATE
PRICE
PRICE/UNIT
ACTUAL CAP
Colonial Pointe/Silver Spring Apts
Milwaukee
Berrada Properties Management
Daniel W. Bruckner
7/29/2014
$12,929,000
$33,495
8.15%
Park Bluff Apartments
Milwaukee
The Related Companies
Star Holdings of Illinois, LLC
10/9/2014
$6,950,000
$37,366
Undisclosed
Aspen Apartments
Hudson
Campbell Property Management
Goodman Real Estate, Inc.
10/31/2014
$5,700,000
$80,282
Undisclosed
Woodland Apartments
Madison
Mirus Partners
Nimrod Realty Group, Inc.
10/30/2014
$5,650,000
$44,141
Undisclosed
Trumpeter Trail Apartments
De Pere
Northern Management, LLC
Ogden & Company, Inc.
8/4/2014
$3,860,000
$68,929
6.80%
BUILDING
CITY
BUYER
SELLER
SALE DATE
PRICE
PRICE PSF
ACTUAL CAP
Dermatology Associates of WI
Portfolio – Sale/Leaseback
Greater Green Bay
Area
Dr. Sean Pattee
9/15/2014
$28,339,280
$321.62
8.29%
Aurora Health Care
Kenosha
Carter Validus Mission Critical
REIT
American Realty Capital
Healthcare Trust
The Boldt Company
10/31/2014
$24,453,100
$446.06
Undisclosed
Medical Center– 1200 10th St W
Altoona
Haselwander Bros, Inc.
River Prairie Holdings Inc
8/6/2014
$8,300,000
$267.74
7.67%
BUILDING
CITY
BUYER
SELLER
SALE DATE
PRICE
PRICE/ROOM
ACTUAL CAP
Residence Inn – Mke Downtown
Milwaukee
CSM Corporation
Investcorp International, Inc.
9/16/2014
$24,500,000
$187,023
Undisclosed
*Radisson
Menomonee Falls
Izabella Hmc-Mf LLC
Professional Hospitality, LLC
10/30/2014
$8,500,000
$62,963
Undisclosed
*Courtyard By Marriott
Brown Deer
Hawkeye Hotels
General Electric Capital Corp
12/19/2014
$7,650,000
$66,522
Undisclosed
Sleep Inn & Suites
Sheboygan
Rattan Soni
Himanshu Parikh
8/6/2014
$2,675,000
$44,583
15.00%
Towne Briohn I
ACTUAL CAP
OFFICE SALES
RETAIL SALES
MULTI-FAMILY SALES
MEDICAL
HOSPITALITY
*Indicates a distressed, REO and/or auction sale.
Colliers International | P. 3
MARKET REPORT | Q4 2014 | INVESTMENT SALES | WISCONSIN
continued from page 2…
8. Vintage Parts Sale/Leaseback
In March, Beaver Dam, WI-based Vintage Parts, Inc. sold their corporate headquarters and warehouse
buildings for over $35M. The nine building portfolio traded for a 7.50% cap rate at $52 PSF. LCN Capital
Partners (New York, NY) acquired the portfolio in a sale/leaseback transaction with a 20 year initial lease
term. The deal was financed through CMBS debt. Vintage Parts is a distributor of slow moving and
inactive service parts inventory for major original equipment manufacturers.
482 offices in 62
countries on 6
continents
9. Dermatology Associates of WI Sale/Leaseback
United States: 140
Canada: 42
Latin America: 20
Asia Pacific: 195
EMEA: 85
Florida-based Carter Validus Mission Critical REIT purchased a sale/leaseback portfolio of nine properties
occupied by Dermatology Associates of Wisconsin. The buildings total 88,114 SF and are all located in or
near Green Bay. The transaction closed in mid-September for over $28M or $322 PSF with a cap rate of
8.29%. This is Carter Validus’ third major acquisition in Wisconsin in the past 12 months. Last October,
the REIT purchased the AT&T Data Center in Pewaukee for $51.8M, which secured the #1 spot in our Top
2013 List of Most Significant Wisconsin Investment Sales. The REIT also purchased a data center in
Milwaukee for $19.5M in March of 2014.
10. Shops at Nagawaukee
Told Development Company (Plymouth, MN) sold a two building portfolio to an investment group led by
Wangard Partners (Wauwatosa, WI). The retail buildings, totaling 57,015 SF, were acquired for $13.75M
($241 PSF) at a 7.35% cap rate. Built in 2004, the buildings are part of the Shoppes at Nagawaukee
development and are 100% occupied by a strong list of national tenants including Best Buy, Panera Bread,
Noodles & Company and Qdoba Mexican Grill. The Shoppes at Nagawaukee are the final phase of the
master planned Nagawaukee Center, which has been sold off in pieces over the past few years.
Nagawaukee Center Phase II was listed as #9 in our Top 2013 List.
HONORABLE MENTIONS (in order of dollar volume)
DOLLAR VOLUME
CAP RATE
($ MILLIONS)
BUILDING NAME
ADDRESS
CITY
TYPE
Student Housing Portfolio
Various Addresses
Milwaukee & Out of State
Student Housing
$44.47
Undisclosed
Residence Inn
648 N Plankinton Ave
Milwaukee
Hospitality
$24.50
Undisclosed
Milwaukee Data Center
1099 Walnut Ridge Dr
Hartland
Office Data Center
$19.50
8.37%
Six Points Apartments
6516 W National Ave
West Allis
Multifamily
$19.20
6.71%
South Main Center
Various Addresses
West Bend
Retail Portfolio
$19.12
6.79%
Gander Mountain
2440 E Moreland Blvd
Waukesha
Retail Single Tenant
$18.28
8.35%
Staples Distribution
120 W Opus Dr
Oak Creek
Industrial Single Tenant
$17.00
7.29%
Forest Plaza
Various Addresses
Fond du Lac
Retail Ground Lease
$16.83
7.38%
The Tannery
Various Addresses
Milwaukee
Office Portfolio
$16.28
Undisclosed
INVESTMENT SERVICES | WISCONSIN
$2 billion in annual revenue
2.5 billion sf under management
13,500 professionals and staff
COLLIERS INTERNATIONAL
WISCONSIN
Corporate Office
1243 N. 10th Street
Suite 300
Milwaukee, WI 53205
TEL: 414 276 9500
Madison Office
8401 Greenway Boulevard
Suite 248
Madison, WI 53562
TEL: 608 826 9500
Fox Valley Office
200 S. Washington Street
Suite 203
Green Bay, WI 54301
TEL: 920 366 6631
Research:
Tyler Jauquet
Direct +1 414 278 6811
tyler.jauquet@colliers.com
Copyright © 2015 Colliers International.
The information contained herein has been
obtained from sources deemed reliable.
While every reasonable effort has been
made to ensure its accuracy, we cannot
guarantee it. No responsibility is assumed
for any inaccuracies. Readers are
encouraged to consult their professional
advisors prior to acting on any of the
material contained in this report.
Tom Shepherd, CCIM
Partner | Wisconsin
Direct +1 414 278 6815
Tom.shepherd@colliers.com
www.colliers.com/wisconsin
Joe Eldredge
Vice President | Wisconsin
Direct +1 414 278 6825
Joe.eldredge@colliers.com
Jennifer Bullock
Investment Analyst | Wisconsin
Direct +1 414 278 6867
Jennifer.bullock@colliers.com
Accelerating success.
Colliers International | P. 4