As many of the Milwaukee area’s legacy manufacturers reassess their physical footprints, Milwaukee County is on track to have more than 4 million square feet of old industrial space on the market in 2024 — the most since the early 1980s, according to one commercial real estate broker. Regal Rexnord, Master Lock, Komatsu, Stellantis and
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Master Lock's Milwaukee factory at North 32nd and West Center streets.[/caption]
Two large campuses could come available in West Milwaukee — a village of only one square mile:
In 2022, Komatsu Mining Corp. opened a new $285 million headquarters in Milwaukee’s Harbor District to consolidate office and manufacturing space. The company still owns a 44-acre manufacturing campus at 4400 W. National Ave. with around 1 million square feet of building space.
The company has said it will end operations at its West Milwaukee facility but did not respond to a request for comment on its future plans for the campus.
This year, manufacturer Regal Rexnord announced that it is closing its West Milwaukee plant. The company has listed the 56-acre campus, located at 4800 W. Mitchell St., for sale for $15 million. The campus has a total of 750,000 square feet of building space and was first built in 1920.
Lastly, manufacturer Briggs & Stratton Corp. announced that it would lay off 160 workers by the end of this year at its Wauwatosa plant, located at 3300 N. 124th St.
Last year, the company sold the Wauwatosa plant, built in 1955, to Milwaukee-based Phoenix Investors. The real estate firm is marketing the one million-square-foot building for continued industrial use.
The average age of these properties is 93 years old, the average campus size is 45 acres and the average building footprint is 820,000 square feet — all of which complicate the campuses’ industrial future.
“Are there 20 or 25 manufacturers waiting for a million square feet to come available? No,” Larkin said. “The unfortunate thing for some of these owners is that it’s all happening at the same time. If one of them came available, there’d probably be a feeding frenzy on it.”
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Briggs & Stratton Corp.'s Wauwatosa facility. Image from LoopNet[/caption]
Redevelopment or re-leasing?
Brokers agree that the Briggs & Stratton facility in Wauwatosa is most suited for continued industrial use as the building is the newest of these campuses and it is surrounded by other industrial users and retail. The property is also easier to subdivide, Hoffman said, creating an opportunity for smaller users to occupy the space.
However, the other campuses’ future as industrial properties are less clear.
The Stellantis, Master Lock, Regal Rexnord and Komatsu campuses all sit in mostly residential neighborhoods.
The industrial benefit for these sites is they’re surrounded by housing and workforce, according to Larkin, which is something that industrial properties built on the periphery of the metro area don’t have.
“If you’re looking to run a couple of shifts and have a choice of building in Oconomowoc or Sussex versus buying a plant in Milwaukee or West Milwaukee, you’re going to have significant advantages when it comes to labor,” Larkin said.
Still, updating the properties for modern industrial use would be expensive, and strong demand for housing makes redevelopment an appealing option.
“Given their obsolescence and massive square-footage, it would be very difficult for these properties to remain as is and remain industrial,” said Dan Palec, director of research at Cushman & Wakefield | Boerke.
The average industrial lease square-footage in Milwaukee County this year was 30,000 square feet and the median was 12,000 square feet.
“The costs to subdivide these properties that are already very specific would just not be economically feasible in every instance, especially when there are redevelopment possibilities,” Palec said.
Each property has unique circumstances that will determine the redevelopment potential, Brokers said. For instance, Hoffman said the future of the Komatsu site could be contingent on what happens with possible development of American Family Field’s parking lots, which will be studied under a new funding package from the state.
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The Komatsu site in West Milwaukee.[/caption]
Redevelopment would take some time, given the complex nature of the projects that would necessitate zoning approval, environmental testing and remediation, and site clearance, among others.
“What traditionally ends up happening with these is they’ll get marketed as industrial properties with, depending on the challenges, redevelopment on the horizon,” Larkin said.
Redevelopment of these sites could bring dramatic transformations to the respective neighborhoods, Hoffman said, especially since many of these facilities have been operational for generations.
“These communities have one shot to do this right,” Hoffman said.