Lots of luxury: East side, 3rd Ward see glut of high-end rental units - The Business Journal of Milwaukee:

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Ryan Schultz, a partner at , Glendale, countd at least six new apartment buildings under development and two or three more are in theproposalp stages. Plus, condominium developers and owners are renting an estimated 300 units because of lacklustertcondo sales, adding even more inventoru to an already-saturated market, Schultxz said. Schultz’s analysis of the downtown Milwaukeer apartment market stopped him from constructinyg a multifamily rental buildinv on the banks of the Milwaukese Riverthis year. “We see a surplus of apartments and plan to hold off buildinfin downtown,” Schultz said. While the downtownb apartment market is showing increased vacanciesof 4.
3 percent and a 1.9 percen decline in rents compared with a year ago, according to , a Ohio, real estate investment firm, HSI Propertiea is moving ahead with a 149-unit rentalk project called The Enclave at North 62nd Stree t and West Martin Drive in Wauwatosa. Unlikr Milwaukee, where vacant lots are available for development on manydowntowmn blocks, a limited number of possible developmengt sites are suitable for multifamilu buildings in Wauwatosa. “The barrier of entryh in Wauwatosa gives us acompetitive advantage,” Schultz Milwaukee’s recently opened One at the North End, an 83-unitt luxury apartment building at 1551 N. Watere St.
The building is 65 percenft filled after being on the market for two saidPhil Aiello, a Mandel Groulp project manager. “We are at the high end of the luxuryhapartment market, and the fact we’ve been well receiverd by renters is a testament to our design and Aiello said. Mandel is asking from $1,065 to $2,35 0 per month for rents at One at theNortn End. The real estate development firm also recentlh broke ground ona 75-unit apartment projecty at 444 E. Corcoran St. in the 3rd “The shadow market of renting condominiums has an impact on the apartment market, but we can compete because of high-ene finishes in our rental units,” Aiello said.
Dan a real estate analyst for Red Capital Group, called the condominium rentalsz a “shadow market” because no databases are availablew in markets to track the numberd of units that are being rented. “We think the condo shadow market in Milwaukee is an aggressiveerental market,” Hogan said. The largest condo development in Milwaukee that is renting finished units is the Park a $102 million, 282-unit project in the 2000 bloclk of North Prospect Avenue on the east In April, Warren owner of the development, said he is using a lease-to-ownj strategy to jump-start condo sales. Barr has sold about 80 condoxs atPark Lafayette, and some of the sold unitw are being rented.
The 80-unit River Renaissance 102 N. Water St. in the 3rd also has resorted torenting hard-to-selo condos. Other apartment buildings that have been built or are undefr construction in or near the 3rd Ward includesRobert Joseph’s 100-unit building at Menomonew and Jackson streets, Lighthouse Development’s 55-unitf building at 235 E. Pittsburgh St. in the Soutu Water Works development, and ’ 80-unitr apartment in the Pritzlafft Building at Plankinton andWest St. Paul Even with three new apartmenty buildings going up near thePritzlafff Building, Ken Breunig remains bullish on the market.
“Oure surveys indicate strong demand for rental units and the dollars per squaree foot for apartments is said Breunig, the managing partner of Sunset Investors. Breunig, whos e company also owns the 500,000-square-foot Plankinton Buildinh at 161 W. Wisconsi n Ave., said he is moving forwarr with plans to converty former office space onthat building’s third floor into 30 Construction is under way on eight he said. Meanwhile, the real estate investment firm’xs 2009 outlook of the Milwaukee downtown rental marketis dim.
Peter O’Neil, a researcher for the California-based said in his second-quarter reporf for 2009 that vacancies are expecteto rise, putting even more pressure on rents to The sagging apartment rental market also is affecting the sale of apartmentf investment properties. In fourth-quarter 2008, two class A apartmenr buildings sold in the Milwaukee market for an averagdof $99,811 per unit. The recent sale of the 112-uniy Woods Apartments in Franklin netted theowners $51,0090 per unit, about a 50 percent drop from buildinge sold in 2008. The Woods Apartments sold for $5.7 million.
It was ownerd by Ilona Tomasini, Joseph Lukitscj and the and sold to a limited liability company owned byLandstar Development, Lincolnwood, Ill.