Milwaukee Office Expansions, Relocations Despite Covid

Even as Wisconsin emerges as one of the nation's hot zones in the COVID-19 pandemic's surge, major office expansions and relocations are still happening in the Milwaukee area.

One of the latest involves North Shore Healthcare LLC, which in October moved its corporate offices from Glendale to HUB640, 640 N. Phillips Ave., in downtown Milwaukee.

But that deal has a specific characteristic typical of the pandemic: most of North Shore's employees continue to work remotely.

"They’re obviously coming back to work slowly and following guidelines," said Tony LIndsay, principal at Chicago-based North Wells Capital LLC, which operates the building.

North Shore Healthcare, which manages around 70 nursing homes and assisted living facilities in Wisconsin, Minnesota, Michigan and North Dakota, in April announced plans to move 55 employees from 5150 N. Port Washington Road to HUB640.

The company plans to expand to around 80 employees by October 2021.

North Shore Healthcare is leasing 23,000 square feet for 10 years at HUB640.

North Wells Capital created HUB640 by renovating the former Boston Store building into around 66,000 square feet of street-level retail space and 230,000 square feet of offices on floors two through five.

That work occurred after the Boston Store department store chain's corporate parent, Bon-Ton Stores Inc., was liquidated in 2018. 

North Wells Capital had a "handshake agreement" with North Shore Healthcare before the pandemic surfaced in Wisconsin in March, Lindsay said.

Both sides proceeded to negotiate a lease to finalize the transaction.

"It truly was a deal that dawned in COVID," Lindsay said. "We had many conversations about how the pandemic would affect the deal."

That included how North Shore Healthcare's space would be built "in a manner that was a response to people coming back to work post-pandemic," he said.

There was "some easy stuff," Lindsay said, such as adding hand sanitizer in the lobby and signs to encourage social distancing.

The building's mid-size height, with North Shore Healthcare on the second floor, also provides an alternative of using the atrium stairs instead of the building's elevator, Lindsay said.

And, North Wells Capital adjusted the building's ventilation system to circulate more air and upgrade its filters, he said.

The work on building North Shore Healthcare's space started in May.

The project included amenities — conference facilities, a fitness center/yoga room and a new outdoor roof deck — for all of the building's office tenants.

The conference room was a key part of finalizing the North Shore Healthcare lease despite the pandemic, Lindsay said.

"It really gives employees the options of being spread apart," he said, "and being able to communicate face to face without being confined to a small space."

Meanwhile, construction workers were able to spread out to reduce the risk of spreading the coronavirus, Lindsay said.

"We had the luxury of having a 57,000-square-foot floorplate," he said.

There were "minor scares," Lindsay said.

On a couple of occasions, he said, construction workers reported having close contact with someone who tested positive for the virus.

"We basically cleared a site until people got tested and had a negative test," LIndsay said. "People in close contact were quarantined for two weeks."

That resulted in work being shut down for only a day or two while North Wells Capital and its contractors determined who should be quarantined.

"Thankfully, it was able to be navigated," Lindsay said.

Other offices on the move

Other Milwaukee office headquarters projects that were completed during the pandemic include Badger Mutual Insurance Co.'s relocation this summer from 1635 W. National Ave. to The 42, the remodeled former Pabst warehouse at 1134 N. 9th St.

Also, two major downtown law firms have been on the move.

Michael Best & Friedrich shifted from the 100 East office tower, 100 E. Wisconsin Ave., to the new 25-story BMO Harris Tower, 790 N. Water St.

Meanwhile, Husch Blackwell moved from Cathedral Place, 555 E. Wells St., to the new 11-story Huron Building, 511 N. Broadway.

In addition, BMO Harris Bank has relocated its Milwaukee operations to its namesake tower from its former building, 770 N. Water St., and Milwaukee Center office tower, 111 E. Kilbourn Ave.

Infrastructure contractor Michels Corp. will consolidate its Milwaukee operations at an eight-story office building to be finished by year's end at the River 1 development. That mixed-use project overlooks the Kinnickinnic River at South First and West Becher streets, in the Harbor District.

Other moves are coming in 2021 and 2022.

The Milwaukee Journal Sentinel is to relocate next year to the 330 Kilbourn office complex, 330 E. Kilbourn Ave., with its former site, at 333 W. State St., being converted into apartments.

In June, Landmark Credit Union is to move from New Berlin to its new five-story headquarters being built at 555 S. Executive Drive, Brookfield.

Both Hydrite Chemical Co. and actuarial firm Milliman Inc. will move their Brookfield operations to Golf Parkway Corporate Center in 2022. Those two-story and six-story office buildings are under construction between I-94 and West Blue Mound Road, west of Calhoun Road, in Brookfield.

Remote work remains an option

Most companies are still giving their office employees the option of working remotely. Their workplaces use such tactics as face coverings, social distancing, staggered schedules, increased sanitizing and temperature checks to help combat COVID-19's spread.

"While we are only bringing a small number of staff back initially to ensure a safe environment for everyone, we look forward to when we can have our full team together," said Sean Bailey, North Shore Healthcare's vice president of asset management.

"We believe it will allow us to streamline and enhance the services and support we provide our facilities and team members in the field,” Bailey said in a statement.

It isn't clear when North Shore Healthcare will bring all of its office employees to the new headquarters.

"Like other employers, we continue to assess the situation and the recommendations from health authorities to determine when it is safe to have our full support team together in our new space," Bailey said.

The company is the only signed tenant so far at HUB640.

The Milwaukee area's office vacancy rate was 15.1% as of Sept. 30, according to a report released recently by the Commercial Association of Realtors-Wisconsin. That's up from 14.6% as of June 30.

“Showing velocity slowed in the third quarter, and overall transaction time has increased as tenants rethink their office space needs,” John Dulmes, executive vice president for Transwestern commercial real estate brokerage, said in the report.

But, with the completed space, including the shared amenities to show, HUB640 is drawing more attention from prospective tenants, Lindsay said.

"There’s no doubt leasing is slow. But if you have the right product I think there are still deals that can be done," he said.

Read the full article here.