CHICAGO, MILWAUKEE—R2 Cos., a Chicago-based real estate investment firm, has just bought for about $13.5 million the Post Office Building on Milwaukee's downtown riverfront. The iconic four-story structure was a build-to-suit for the United States Postal Service in 1968, and the agency has occupied it ever since. What will happen with the 9.3-acre site is not yet known, as the post office will continue to operate it as a central mail sorting facility for at least five more years.
“We've got a very patient outlook from a capital perspective," Matt Garrison, R2's managing principal, tells GlobeSt.com. “If we have to keep it for five years, or even ten, we're fine with that." In a way, the property's status opened up an opportunity for R2, which has started looking for deals in secondary Midwest markets. Investors that were attracted to a property with a rock-solid tenant like USPS also preferred one with a longer lease, and most developers looking for a quicker payday did not want to wait five years. "It was a bit of a tweener."
But Garrison says the company is already working on its plans. He envisions a mixed-use development “anchored by a large retailer, probably a grocer, with creative office space on the top floor,” which could also include a huge outdoor space. “It's a concrete loft with 24' clear ceilings everywhere; it needs to be opened up, but we are planning to cut spaces into the walls to let more natural light in.”
Furthermore, “it's the transportation hub of Milwaukee,” situated next door to the Milwaukee Intermodal Station, Milwaukee's main intercity bus and train station, which was renovated in 2007, and will be a hub for the city's proposed streetcar line. It has 1500 feet of frontage on the Menomonee River, and is adjacent to the Third Ward and Walker's Point neighborhoods, as well as the Harley Davidson Museum campus.
"We believe Milwaukee is poised for continued urbanization and growth,” says Garrison. “All necessary elements are in place and we want to build on the existing traction and civic pride from projects such as the Riverwalk, the new Bucks Stadium, the Calatrava Milwaukee arts museum, the new Northwestern Mutual and Johnson Controls buildings. Milwaukee is becoming an incredibly livable and attractive urban area, a Portland of the Midwest."
“A developer is lucky to get one or two opportunities in a career to work on a project of this magnitude," Garrison adds. "Our objective is to be patient stewards of this site and develop it in the best possible way for the City of Milwaukee."
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
