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Washington Square office tower still seeking tenants, loan

Land and Space

Journal Sentinel business reporter Tom Daykin talks about commercial real estate and development.

Oct. 06, 2011
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By Tom Daykin of the Journal Sentinel

Oct. 06, 2011 0

In April, it was announced that the Baker Tilly accounting firm had signed a letter of intent to lease around 60,000 square feet at the proposed Washington Square office tower, in downtown Milwaukee.

Three months earlier, I'd reported that the Godfrey & Kahn law firm said it would lease about 80,000 square feet at Washington Square. It would be built on what is now a surface parking lot south of E. Mason St., between N. Jackson and N. Jefferson streets, just east of the Pfister Hotel.

Since then, however, it's been quiet--prompting questions from readers about the project's status.

Washington Square developer Joel Lee tells me the building now has tentative commitments for around 160,000 square feet of space.

But Lee, who's developing Washington Square in a joint venture with Irgens Development Partners LLC, wants to build more than 300,000 square feet.

To obtain a construction loan, the project needs 80% of its space committed to tenants, he said. That amounts to at least 240,000 square feet, depending on the office tower's size.

"We don't have enough tenants at this time for the size of the building we want to build, and the financing that it would require," Lee said.

That 80% requirement reflects the tighter lending environment following the recession and near-collapse of the global financial services industry.

"I can remember the days when you could do it at 40%," said Lee, who operates Van Buren Management Inc., and has developed several downtown office buildings.

"It's a new world," he said.

Lee added that the developers are continuing to work on the project.

But, he said, "I can't tell you when it's going to happen."

Baker Tilly, which now leases space at Honey Creek Corporate Center, north of I-94 and west of S. 84th St., and Godfrey & Kahn, a tenant at the Marshall & Ilsley/Harris Bank building, 780 N. Water St., are still committed to Washington Square, Lee said.

I was unable Wednesday to reach a Baker Tilly executive for comment. Godfrey & Kahn spokeswoman Emily Friedrich said the firm remains committed to the project.

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About Tom Daykin

Tom Daykin covers commercial real estate and development.

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Helpful Links and Resources

Check the Milwaukee Assessor’s Office website, which includes tools to look up property assessments.

Find property assessments for other communities throughout the state at AssessorData.org.

The Milwaukee Department of City Development website includes information on the city Plan Commission and Redevelopment Authority.

The Commercial Association of Realtors Wisconsin offers information on commercial realtors and real estate.

The Milwaukee chapter of the Institute of Real Estate Management serves the needs of real estate management professionals

The Wisconsin chapter of the NAIOP Commercial Real Estate Development Association aims to serve developers and owners of commercial real estate.

Awards

The Land and Space blog was recognized by the Society of American Business Editors and Writers in the blog category for dailies with circulation between 200,000 to 500,000.

The judges said, "Daykin’s aggressive reporting and accessible, explanatory writing make him a must-read for his tight-knit and highly engaged audience."


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