Downtown Milwaukee’s Reuss Federal Plaza sold

One of downtown Milwaukee’s largest and better-known office buildings, Reuss Federal Plaza, has been sold.

Also marketed as The Blue, the office building, 310 W. Wisconsin Ave., was sold by an affiliate of Philadelphia-based RAIT Financial Trust to an affiliate of New York-based Time Equities Inc., according to an announcement Tuesday from Colliers International’s Wisconsin office.

The sale was brokered by Tom Shepherd and Dan Wroblewski, both of Colliers.

A sale price wasn’t disclosed. One source said the building sold for $19.5 million, 31% below its $28.3 million assessed value.

The 14-story building has around 578,000 square feet divided between two cobalt blue towers, connected by an atrium. It’s downtown’s third-largest office building after the U.S. Bank Center and the 411 East Wisconsin Center.

The building opened in 1983 to house federal government agencies and private sector tenants. But the building began losing major tenants around 15 years ago.

The U.S. Forest Service moved in 2003 to the Gas Light Building, 626 E. Wisconsin Ave., and the Internal Revenue Service relocated in 2005 to 211 W. Wisconsin Ave.

Another large tenant, Bon-Ton Stores Inc., will shift across the street this summer after its headquarters renovations are completed at the Boston Store building, 331 W. Wisconsin Ave.

At that time, the building’s occupancy rate will drop from 52% to around 40%, Shepherd said.

But Reuss Federal Plaza is positioned within a redeveloping area of downtown.

Along with the Boston Store building’s renovations, other nearby W. Wisconsin Ave. projects include the Grand Avenue mall’s redevelopment into apartments, offices and other new uses, and the conversion of the Warner Grand Theatre into the Milwaukee Symphony Orchestra’s new concert hall.

Also, Reuss Federal Plaza is within four blocks of the future Milwaukee Bucks arena, and near newly converted apartment buildings and hotel developments on downtown’s west side, also known as Westown.

The building’s major tenants include Captel, Previant Law, the General Services Administration, ESPN Wisconsin 540 AM and the Capital Grille.

The new operator, Time Equities, “is excited to be part of the revitalization of Westown,” Shepherd said.

“There is strong investor interest and real estate momentum in the neighborhood,” Shepherd said in a statement.