BMO Harris tower latest signal of downtown boom
If you needed more evidence that downtown is seeing an unprecedented surge of commercial development, consider Thursday’s news of a 25-story office tower that will be the future Milwaukee offices for BMO Harris Bank.
That project alone will cost $137 million, while also providing a new home for one of the city’s biggest law firms, Michael Best & Friedrich.
It also will lead to the $90 million redevelopment of the bank’s current home, a neighboring 20-story office building, into a mix of new uses that could include a hotel and apartments.
Those projects, announced by the Irgens development firm, are among the latest in a series of large developments remaking the downtown skyline. They include the new $524 million Milwaukee Bucks
arena; an entertainment center that the basketball club’s owners will build; Northwestern Mutual’s $450 million office tower; a $100 million, 33-story apartment high-rise that Northwestern Mutual is building as an investment; and developer Rick Barrett’s planned $122 million, 44-story Couture apartment high-rise.
“There’s never been a building boom in this city like we are seeing,” city Development Commissioner Rocky Marcoux said at a news conference announcing Irgens’ new office tower, dubbed the BMO Harris Financial Center.
Irgens will own the new tower, which will be built south of E. Wells St., between N. Water St. and N. Broadway. It will replace the current BMO Harris building’s seven-level parking structure, which will be demolished.
Construction work on the privately financed, 357,448-square-foot office tower is to begin by fall 2017, with completion in December 2019.
BMO Harris will lease 115,000 square feet for its offices as well as 9,260 square feet for a bank branch, with Michael Best & Friedrich leasing 59,000 square feet on the top three floors, according to Irgens. With just those two lead tenants, the BMO Harris Financial Center already has 51% of its space committed.
While that leaves more than 174,000 square feet still available, developer Mark Irgens is confident the demand exists to fill the new building within a year or so of its completion.
Irgens cited the growing number of suburban businesses that are shifting to downtown in order to better retain and recruit employees, especially members of the millennial generation.
“It’s a great phenomenon,” he said.
Downtown hasn’t always seen a strong demand for office space. But it took Irgens just six months to get BMO Harris and Michael Best & Friedrich to commit to the proposed new office tower, allowing the project to proceed.
BMO Harris this spring issued a request for developers to provide proposals for a new building.
The Chicago-based bank’s executives had been thinking about a new, modern location for its Milwaukee operations since 2011, said Dave Casper, BMO Harris president and chief executive officer. That’s when corporate parent BMO Financial Group, based in Toronto, bought Milwaukeebased bank holding company Marshall & Ilsley Corp. and its headquarters building, which opened in 1968.
When Irgens discussed his proposal with bank executives, they suggested contacting Michael Best & Friedrich as a possible tenant. The law firm’s current lease at the 100 East tower expires at the end of 2019, so the timing was right, Irgens said.
Also, to help seal the deal, Irgens agreed to buy the 20-story BMO Harris Building, 770 N. Water St., from the bank and redevelop its 280,000 square feet into new uses. Those could include retail on the street level and some offices, as well as a possible hotel or apartments, on the upper levels, Irgens said.
That work won’t begin until 2020, after the bank moves out.
Irgens said the 48-yearold building is in good condition. But its average floor size of around 13,000 square feet is about half the size of what many current office users want, he said.
The announcement of the new office tower also marks another recent shift of some of downtown’s largest businesses moving among different buildings.
The current BMO Harris building lost its largest outside tenant when law firm Godfrey & Kahn moved in March to anchor the new 18-story 833 East office building, which Irgens developed at 833 E. Michigan St. at a cost of $101 million.
Now, Michael Best & Friedrich is preparing to move just a few blocks to the BMO Harris Financial Center from the 100 East building, 100 E. Wisconsin Ave. The law firm leases around 90,000 square feet at 100 East.
The move will give Michael Best & Friedrich a new location that can accommodate more shared
workspace and other features that would be difficult to create at 100 East, said Danielle Bergner, managing partner of the firm’s Milwaukee office.
“Certainly, renovating the space we are in right now would’ve been disruptive,” Bergner said.
Also, locating in the new building gives Michael Best & Friedrich a chance to be part of “a major transformation” of an entire city block, Bergner said. She said the firm could end up leasing up to 62,000 square feet at BMO Harris Financial Center.
Michael Best & Friedrich’s pending move will take an anchor tenant from the 35-story, 435,600square-foot 100 East, built in 1988. It was sold in August for $78 million to a group affiliated with Santa Monica, Calif.-based Hertz Investment Group.
Finally, BMO Harris, along with moving 700 employees
from its current building, will also relocate 150 to 200 employees to the new office tower from leased space at the nearby Milwaukee Center office tower, 111 E. Kilbourn Ave.
The BMO Harris Financial Center will have its main entrance on N. Water St., with the parking entrance and around 7,200 square feet of additional retail space on N. Broadway. There will be eight levels of enclosed parking, totaling around 600 stalls, and a street-level connector building between the new tower and the old BMO Harris building.
The project architect is Kahler Slater. The listing broker is Colliers International.
The new building is an example of the commitment BMO Harris has made to Milwaukee since it bought Marshall & Ilsley, Marcoux said.