Large downtown office tower in foreclosure
One of downtown Milwaukee’s largest office towers is in foreclosure after losing its largest tenant to a new building.
The 35-story 100 East, 100 E. Wisconsin Ave., has an occupancy rate of around 50%, according to one source.
The 435,629-square-foot building was 88% leased when it was sold in 2016 for $78 million. Its current assessed value is $73.7 million.
The building’s owner, an affiliate of Santa Monica, Calif.-based Hertz Investment Group, doesn’t appear to be contesting a foreclosure suit pending in Milwaukee County Circuit Court.
That lawsuit was filed by Wilmington Trust National Association, the trustee for the building’s lenders.
100 East is being operated by Friedman Real Estate Management, a courtappointed receiver.
Hertz and Friedman representatives didn’t respond to requests for more information about the building’s status.
Typically, a receiver will operate a financially troubled building for a relatively short period before it is sold.
100 East was built in 1988. For years it was anchored by the Michael Best & Friedrich law firm, and featured other prominent Milwaukee businesses among its tenants.
But 100 East suffered a major blow when Michael Best announced in 2016 that it would be an anchor tenant in the proposed BMO Tower, 790 N. Water St. That news came just three months after the building was sold to Hertz.
BMO Tower opened last year amid the COVID-19 pandemic. Michael Best has since moved its operations there, although some of its attorneys and staffers continue to work remotely.
Another major tenant, accounting and business consulting firm PricewaterhouseCoopers LLP, in 2016 moved to the new 833 East, 833 E. Michigan St..
100 East’s remaining tenants include Wells Fargo bank and hotel and theater operator Marcus Corp.
Meanwhile, the Milwaukee-area office market showed signs of recovery during the three-month period ending in June, according to the most recent market report from the Commercial Association of Realtors-Wisconsin.
Nationally, the office market recovery is expected to begin by mid-2022, according to a second quarter report from commercial real estate services firm CBRE Inc.
“Downside risks from COVID-19 cases and hybrid working trends present a medium-term challenge, but long-term economic growth will eventually overcome this,” that report said.