Milwaukee isn’t different from most Midwest cities: The COVID-19 pandemic has upended life here, with kids attending school remotely, businesses working under capacity restrictions and municipal leaders trying to coordinate the distribution of vaccines to a population hungry for normalcy.
And the commercial real estate market here? It’s changed, too, during the last 13 months. But the good news is that Milwaukee and its suburbs have proven resilient during these challenging times. Yes, leasing activity has slowed. Retailers have struggled. And offices in the city’s CBD largely remain quiet.
But the real estate pros working this market say that the market has survived. And the rest of the year looks brighter.
Chad Navis, director of industrial investments with Milwaukee’s Zilber Property Group, said that the city’s CRE market is now set for a strong second half of 2021. That’s partly because the market has been so resilient even during the height of the pandemic.
“As an industrial investor and landlord in southeast Wisconsin, we were well-positioned and fortunate to weather the unforeseen disruptions of 2020,” Navis said.
Part of Zilber’s success can be traced to the efforts the company’s CRE professionals took, Navis said. Company pros worked closely with their clients to help boost the odds that they’d survive any pandemic-related slowdowns.
“We took a structured, proactive approach to portfolio management from the onset of the pandemic, working with our tenants on merit-based assistance requests,” Navis said. “Governmental assistance and stimulus programs, coupled with many of our industrial clients being deemed essential businesses, kept the vast majority of our tenant base within our industrial portfolio operational and their employees safely working.”
That doesn’t mean that challenges don’t lie ahead. Navis pointed to a variety of drivers of inflation, including those associated with supply chain issues centered around raw materials and manufacturing components, as posing a new challenge to the users of industrial space.
But like other CRE professionals across the Midwest, Navis is predicting a strong second remainder of 2021.
“Our team experienced nearly a typical year’s worth of leasing activity in our southern Wisconsin properties portfolio during the last quarter of 2020,” Navis said. “This was likely driven by a pent-up demand dynamic early on in the pandemic as users were either focused on operational issues or were being naturally cautious about expansion and new investment plans. The Zilber team is optimistic those strong industrial tailwinds will carry forward into the 2021 development season.”
To meet that anticipated demand, Zilber Property Group is in the process of developing about 1.1 million square feet of projects throughout the southeastern Wisconsin market.