Kenosha-based Bear Development LLC plans to spend about $5 million to convert a 57,626-square-foot office building at 700 W. Michigan St. in downtown Milwaukee into an apartment building, said S.R. Mills, president of Bear Development.
The proposed development, called 700 Lofts, is contingent upon approval of a special use permit by the city’s Board of Zoning Appeals, and low income housing tax credits.
Bear Development purchased the building earlier this year for $535,500, or $9.28 per square foot. The deal was brokered by Mike Wanezek and Lyle Landowski of Colliers International|Wisconsin.
The building has a few office tenants, but is mostly vacant. The only remaining tenants are McGann Associates, Wisconsin Insurance Plan and Community Insurance Information Center Inc. The structure consists of two combined buildings, one a 5-story building constructed in 1910 and the other a two-story building constructed in 1949.
Bear plans to convert the building to a 50-unit apartment building with eight market-rate units and 42 “affordable housing” units for residents with household incomes below the county median, Mills said. In addition, 13 of the units will be reserved for residents with mental disabilities who need supportive services, which will be provided in the building by a local service provider and Milwaukee County.
Bear Development will seek low income housing tax credits for the project early next year through the Wisconsin Housing and Economic Development Authority (WHEDA), Mills said.
The class B office market in the downtown west submarket has a vacancy rate of 32.6 percent according to Xceligent, but the apartment market is healthy and several projects are in various stages of development in and near the downtown area. The Michigan Street building should be much more successful as a residential building, Mills said.
“We’re trying to repurpose the building to, we think, a higher and better use, from B-minus office to high quality residential,” he said. “We think that with its proximity to the freeway and downtown, plus the need for market rate and affordable housing in downtown Milwaukee, it will be a needed infusion to strengthen the area.”
If the special use permit and low income housing tax credits are approved, Bear hopes to begin construction next summer and complete the project by spring of 2014, Mills said.
