Northwestern Mutual's plans to spend more than
$500 million on extensive interior and exterior renovations to the North Office Building at its headquarters campus will provide a major boost in momentum to revitalize the downtown area, real estate industry experts say.
The 19-story, 540,000-square-foot North Office Building is located at 818 E. Mason St. and was built in 1990. It is one of four office buildings on the company’s headquarters campus downtown. Exterior renovations planned for the building will mirror the 32-story, 1.1 million-square-foot Northwestern Mutual Tower and Commons building that opened at its downtown campus in 2017, just south of the North Office Building. Project construction could begin in the fall of this year and be complete in 2027.
The company will eventually vacate its Franklin campus and will move 2,000 employees from there to its headquarters campus downtown over the next three to five years.
“We are doubling down on our Milwaukee campus by investing in the future of the workplace for Northwestern Mutual and a thriving downtown community,” said Northwestern Mutual chief executive officer John Schlifske.
'Who's next?'
That doubling down on Milwaukee had CoStar Group senior market analyst Gard Pecor applauding the insurance giant for making “another huge investment” in downtown Milwaukee.
“I often credit (Northwestern Mutual’s) 2017 HQ tower with kicking off the return to (downtown) that we’ve seen from employers these past (five to six years),” Pecor wrote in a tweet. “Their doubling down further cements (downtown) as the premier office destination for talent and space in (Milwaukee).”
Jenna Maguire, vice president and an office real estate broker at Colliers | Wisconsin, predicted that even more positive news was on the way for city.
“The (Northwestern Mutual) news today was huge for downtown, and I have an educated suspicion there’s more to come this year,” Maguire tweeted. “Downtown #mke is HOT, and flight to quality leads the charge in office space.”
Rick Barrett, chief executive officer of Barrett Lo Visionary Development and the developer of the 44-story Couture apartment tower being constructed near the downtown Milwaukee lakefront, demurred when asked what 2,000 workers in downtown Milwaukee might mean for the apartment complex, but was flush with pride for the city, nonetheless.
"I am thrilled for the city. This was an amazing job by city leadership, especially considering what it takes to get a deal like this done," Barret said. "The fact that Northwestern Mutual is investing their workforce in the downtown marketplace, it is just such an enormous signal that Milwaukee is the best place to be. Momentum is really hard to garner, and it is a move like this that allows us to attract more people and businesses to downtown. You get Fiserv (moving its headquarters from Brookfield to downtown Milwaukee), now you have Northwestern Mutual (moving 2,000 more employees downtown). That is a tremendous reverberation."
"Who’s next? Who else is coming Milwaukee? That is the question in my mind," he added.
Downtown office market
Like many post-pandemic workplaces, Northwestern Mutual has a hybrid office model for its employees. But most of the company’s employees are on campus most of the time, both at the downtown headquarters and in Franklin, Villegas said, and the company wants to bring all of its employees together into the headquarters campus to foster collaboration.
"We always will be a relationship-based culture," Villegas said. "We want to bring everybody downtown so we can build relationships and build connections. We really see the benefits of having everybody together in the same space."
The upgrades to the North Office Building would increase the capacity for Northwestern Mutual’s downtown campus to 9,000, the company says, making a significant impact on the downtown area. The company says it is the largest property taxpayer in the city.
While a single-tenant, owner-occupied project won’t have much impact on Milwaukee’s downtown office market statistics, which largely focus on multi-tenant buildings, Lyle Landowski, president and chief executive officer at Colliers | Wisconsin, said such a massive investment in the city by a Fortune 500 company will make Milwaukee even more attractive to companies looking to attract talent.
"Every city needs a company like (Northwestern Mutual) to put them on the map. They are essentially rebuilding that building. It is going to be a state-of-the-art office building, which is going to attract top talent from around the world, and we are fortunate to have them here," Landowski said. "This investment only bodes well for the continued recovery of the downtown office market. It's a shot in the arm for downtown. It's more of a psychological impact that this a viable place to locate, expand and attract workers."
