Kahler Slater designed the conversion of an obsolete five-story hotel in Milwaukee into a 96-unit luxury multifamily development, Vantage on the Park. The project features first-floor restaurant and retail space and is slated for completion in August 2018. (Kahler Slater)

This article appeared in the spring issue of Urban Land on page 163.

On a windswept prairie south of Milwaukee, one of the biggest real estate developments in the Midwest is gradually taking shape. Along bustling Interstate 94, Taiwan-based multinational electronics company Foxconn Technology Group is investing $10 billion to build some 22 million square feet (2 million sq m) of manufacturing space to make liquid-crystal display (LCD) technology.

Wisconsin Governor Scott Walker signed legislation in September 2017 providing Foxconn with $3 billion in economic incentives for the facility, which eventually could employ up to 13,000 workers.

“In the months ahead, all eyes are on southeast Wisconsin and the need to support the Foxconn development,” says Mark Eppli, professor and Robert B. Bell chair in real estate at Marquette University in Milwaukee. “Foxconn selected this location for a number of reasons, including the combined Chicago/Milwaukee labor force, distribution links, fresh water from Lake Michigan for its manufacturing process, and the availability of 2,000 to 3,000 acres [800 to 1,200 ha] for its facility.”

Wisconsin is not alone in reaping rewards from the Midwest’s growing tech sector. In Indianapolis, technology companies are snapping up downtown space. “Two years ago, rental rates for Class A space in the CBD were $18 to $22 a square foot [$194 to $237 per sq m],” says Kyle Galle, marketing manager at the Indianapolis office of Newmark Knight Frank. “That same space now commands, on average, $27 a square foot [$291 per sq m]. Buildings are almost 100 percent leased.”

Long considered the “land of farms” as well as a huge manufacturing center, the Midwest, including Illinois, Indiana, Ohio, Wisconsin, and Michigan, is being transformed. Many of the major downtowns in the region are being revived thanks to new sports venues and the movement of millennials who want to live in the urban core as well as the expansion of world-class educational institutions and well-known medical centers.

Consider Detroit. Only a few years ago, the central business district (CBD) was suffering as residents fled. But “Detroit has reinvented itself,” says Bobby Schostak, chairman of Schostak Brothers & Company, a commercial real estate business. Schostak also serves as chairman of ULI Michigan and holds chief executive officer positions at MadDog Ventures, a venture capital firm specializing in technology, and the Templar Baker Group, which provides strategic advice for public- and private-sector clients. “There has been an amazing resurgence in Detroit following the city’s reorganization in 2013,” he says. “The economy has improved significantly. Technology has become an important part of the auto sector and a subsector of the local economy as the automobile becomes more technologically advanced and dependent on new industries. Investors are returning to Detroit, and there is significant demand for new office space.”

In Illinois, corporate headquarters are relocating from the suburbs of Chicago to its downtown, invigorating urban neighborhoods. “We expect this migration to continue,” says John Gavin, principal at locally based real estate firm Sterling Bay, which has a track record of closing new headquarters deals in Chicago. “The primary driver is the pursuit of talent. The talent wants to live downtown.”

Ohio is experiencing a balance of new development and renovation. Developers are taking advantage of measured and, in some areas, very strong market demand, says Douglas Bolton, former head of Cushman & Wakefield’s Cincinnati/Dayton region. “Cincinnati’s economy is one of the fastest growing in the Midwest, and the state capital of Columbus is also seeing strong growth,” he notes.

The new 550,000-square-foot (51,100 sq m) global headquarters for McDonald’s is under construction in Chicago’s Fulton Market neighborhood. Developed by Sterling Bay, the building was expected to be completed in 2018 and is targeted for LEED Platinum certification. The nine-story building is a build-to-suit collaboration among Sterling Bay, McDonald’s, Interior Architects, and Gensler. (RM Design Studio)


Office and residential development in Chicago is hitting record levels, so much so that Mayor Rahm Emanuel tweeted in November that “Chicago’s 60th crane marks a fivefold increase from 2010, when the city had 12 operating cranes. The city is also experiencing a five-year high for building permits, with more than 40,000 permits issued to date.”

One reason for that activity is the migration of corporate headquarters to downtown neighborhoods. “Nontraditional locations like Fulton Market, where zoning has been relaxed to allow office use, have been the primary beneficiaries of these moves,” says Gavin. “For the last 100 years, Fulton Market wasn’t considered an office market. Today, 3.3 million square feet [300,000 sq m] is being developed in this new office submarket.”

Already under construction is a new 550,000-square-foot (51,000 sq m) global headquarters for McDonald’s. A collaboration among Sterling Bay, McDonald’s, and Gensler architects, the nine-story building on the former site of Oprah Winfrey’s Harpo Studios in the Fulton Market district was expected to be complete in the first quarter of this year.

Chicago’s downtown office market saw two new office towers completed in 2017: The 1.1 million-square-foot (102,000 sq m) River Point by Hines and Ivanhoé Cambridge, and the 1.2 million-square-foot (115,000 sq m) 150 N. Riverside by Riverside Investment and Development. They are the first new skyscrapers in a decade, says Amy Binstein, research manager at the Chicago office of Newmark Knight Frank. “There are also two more office developments under construction in the area—John Buck Company’s 807,000-square-foot [75,000 sq m] 151 N. Franklin and White Oak Realty Partners’ 625 W. Adams at 435,000 square feet [40,000 sq m]—and several more planned or proposed,” says Binstein.

Sterling Bay’s 1515 W. Webster Avenue, the planned Midwest headquarters of transportation logistics company C.H. Robinson, is expected to be completed in summer 2018. Designed by SOM, the 207,000-square-foot (19,200 sq m) structure with flexible workspaces across four stories is targeted for LEED Silver certification. The four-acre (1.6 ha) project is on the site of the historic Gutmann Tannery on the edge of Chicago’s Lincoln Park neighborhood along the north branch of the Chicago River. (SOM)

Among the more than two dozen residential projects completed, under construction, or planned are the following:

  • Vista Tower, a 1,186-foot (362 m) luxury hotel/condo by Chicago-based Magellan Development and China’s Dalian Wanda Group;
  • One Grant Park, a 76-story, 792-unit multifamily building designed by Rafael Viñoly and developed by Crescent Heights; and
  • One Bennett Park, a luxury condominium tower designed by Robert A.M. Stern Architects and developed by Related Midwest. One Bennett Park has a 1.7-acre (0.7 ha) Michael Van Valkenburgh–designed park at the base.

Chicago’s economy continues to benefit from 1871, the city’s technology and entrepreneurship center that supports the digital startup community. “1871 is home to more than 400 early-stage, high-growth digital startups and has given rise to incredible businesses based in Chicago such as Groupon,” says Liz Holland, chief executive officer of Abbell Associates, a private real estate acquisition, development, and management firm. “High tech is a huge driver of Chicago’s urban rebirth. What’s happening at 1871 will affect the city’s economy and real estate sector for years to come.”

Chicago’s Abbell Associates manages the 137,000-square-foot (12,700 sq m) Arlington Town Square in Arlington Heights, Illinois, for owner Hutensky Capital Partners. The 3.6-acre (1.5 ha) property includes 32 retail spaces, eight office units, and a six-screen movie theater. (Hutensky Capital Partners)

Chicago’s increased development, though, is putting a strain on the city’s permitting and planning departments. “It takes a little longer for approvals,” Gavin says. “Major construction and labor costs have gone up, too, so developers must make sure their projects make economic sense.”

Chicago also must deal with how it is perceived around the world. “The news about Chicago oftentimes is not that positive,” Holland says. “Unfortunately, a lot of institutional investors don’t scratch the surface to find out the real story about Chicago.”

The GE Club building at the former General Electric campus in downtown Fort Wayne, Indiana, dates to the 1920s and will be repurposed as a community amenity and recreation space. (RTM Ventures)


Institutional investors are discovering Indianapolis. With a relatively low cost of living, a good quality of life, and a business-friendly state government, the city is being noticed by not only more tech firms but also national and international investors who are surprised by the yields they can earn, says Jeff Kingsbury, managing principal of Greenstreet, an Indianapolis-based real estate development and consulting firm. “Our legacy as a manufacturing center has evolved to former historic industrial sites being redeveloped as urban mixed-use districts,” he says. “Indy is building one of the first all-electric bus rapid transit systems in the country, which will be an important economic driver.”

Indianapolis continues to attract tech firms, a trend that began two years ago after San Francisco cloud computing giant Salesforce leased about 230,000 square feet (21,000 sq m) downtown in the 48-story Chase Tower (now known as Salesforce Tower) for its regional headquarters. “Companies based in California are moving operations to Indianapolis because they can attract the same level of talent for almost half the cost,” says Newmark Knight Frank’s Galle. “Salesforce is drawing other tech firms and more venture capital. Lessonly, a startup that develops educational software for teams, has grown from 17 employees to 80 and just received an additional $8 million in funding.”

The core of Electric Works—a redevelopment and reuse of the former General Electric campus in downtown Fort Wayne—is a pedestrian promenade called Dynamo Alley, named for an early electrical generator produced at the site. (Elevatus Architecture)

Indianapolis also benefits from a cluster of life-science institutions that contribute significantly to the city’s economic growth. “We have a major medical campus downtown including Indiana University School of Medicine and Indiana University Health adjacent to the 16 Tech campus, a planned innovation community,” says Kelli A. Lawrence, a principal partner at Cityscape Residential, a multifamily real estate development and construction firm based in Indianapolis. “We continue to grow the entrepreneurial side with tech and advanced life-sciences research. Indy is seeing a lot of investment from outside because we have the stability of a Midwest market packaged in a growing, thriving, vibrant city. People are often shocked by the vitality of how much activity we have downtown when they visit.”

Electric Works, a public/private partnership of RTM Ventures and the city of Fort Wayne, Indiana, will include 1.2 million square feet (111,000 sq m) of renovated historic space and 1.6 million square feet (149,000 sq m) of new development. The first phase of Electric Works is expected to open in 2020. (Elevatus Architecture)

Hendricks Commercial Properties is redeveloping Indianapolis’s historic 11-acre (4.5 ha) former Coca-Cola bottling plant into a $240 million mixed-use project. In Fort Wayne, work continues on RTM Ventures’ $440 million Electric Works redevelopment of a 39-acre (16 ha) historic GE complex into a mixed-use innovation district. “Secondary and tertiary cities offer great investment potential for developers and investors who want to create mixed-use walkable places,” says Kingsbury.

For Indianapolis, one of the challenges in the years ahead is to continue its tradition of public/private partnerships. “We’ve had great leaders who have been more pragmatic than partisan and who realized that solving the larger issues requires a partnership between the public and private sectors,” Kingsbury says. “It may be even more challenging in the future.”

Construction was scheduled to begin in early 2018 on a four-story office and retail building on the site of the former Grandview Mercantile retail shop in Columbus’s Short North Arts District. Pizzuti is the developer. (Pizzuti)


Thanks to its strong foundation of education and government as well as a young, talented, and educated workforce, Ohio’s largest city continues to prosper. “Ohio State has 60,000 students in Columbus and our capital is here,” says Bill Brennan, executive vice president and chief financial officer of the Pizzuti Companies, based in Columbus. “We have significant corporate headquarters in Columbus including Nationwide Insurance and Huntington Bank, as well as L Brands [parent company of Bath & Body Works and Victoria’s Secret]. We also have the Ohio State Medical Center, Nationwide Children’s Hospital, Cardinal Health, and OhioHealth, which continue to expand.”

The city is experiencing “careful” office development, including the repurposing of obsolete buildings, adds Brennan. “We’re also seeing steady industrial development because Columbus is within a day’s drive of 60 percent of the U.S. population,” he adds. “We continue to absorb 3 to 4 million square feet [279,000 to 372,000 sq m] of industrial space every year.”

Downtown Columbus is being transformed with new projects, including the renovation of LeVeque Tower, one of the city’s landmark historic buildings. “Columbus also has a number of major multifamily projects under development,” says Robert Vogt, principal at Columbus-based Vogt Strategic Insights, a firm that provides market analyses and feasibility studies. “Hubbard Park Place, a mixed-use project by the Wood Companies and Schiff Capital Group, is one of several new apartment projects under construction in the trendy Short North neighborhood,” says Vogt.

“Borror Properties of Dublin is developing the Castle, a mixed-use complex with regional hamburger restaurant chain White Castle, also in Short North [an arts district in Columbus]. It will include 105 luxury apartments with 11,000 square feet [1,000 sq m] of street-level retail and 12,000 square feet [1,100 sq m] of second-floor offices.”

Columbus is one of the largest cities in the United States that does not have some level of rail transportation, Vogt notes. “Transportation is becoming an increasingly important issue in the region,” he continues, “with the challenge of how to get folks to where jobs are.”

Further north, Cleveland’s downtown is experiencing a rebirth boosted by an expanding economy. “Our well-known medical institutions, including the Cleveland Clinic, University Hospitals, and MetroHealth, and our educational institutions, Case Western Reserve University and Cleveland State University, are investing in real estate downtown,” says Mackenzie Makepeace, director of strategic initiatives at Forest City Realty Trust in Cleveland. “They attract really bright minds who want walkable, authentic living experiences. That demand is helping investors achieve rent rates above anything we’ve seen in the past.”

NRP Group recently opened the Edison at Gordon Square, a 306-unit, amenity-rich apartment community on the city’s west side, which offers green community space and bike lanes, she says. “It leased up quickly,” Makepeace adds. “In Shaker Heights, RMS Investments is developing the Van Aken District, a mixed-use neighborhood center that will include multifamily, office, and integrated retail featuring a food hall, creating a walkable, vibrant town square for the community.”

Cleveland has also has benefited from the redevelopment of predominantly vacant office buildings—“zombie” structures—in the CBD into apartments/multifamily or mixed-use conversions, says Matthew Orgovan, research and marketing manager for Newmark Knight Frank in Cleveland. “What has helped facilitate a majority of these projects has been the federal historic tax credit program,” he says. “As those Class B and C buildings are repurposed, the vacancy rates have tightened and some new construction has taken place.”

Cincinnati, with a national reputation for world-class universities, vibrant arts, and historic architecture, in addition to its low cost of living and doing business, is also enticing companies and millennials. “Cincinnati is a city where you can make your mark,” says Laura Brunner, president and chief executive officer of the Greater Cincinnati Redevelopment Authority. “We are seeing young people choosing to move into our redeveloping neighborhoods to take part in the city’s renaissance.”

Cincinnati’s CBD and inner-ring neighborhoods are also home to a number of innovative partnerships. “Lead developer 3CDC and partners Kroger, North American Properties, Northpointe Group, and Rookwood Properties are building Court and Walnut, an 18-story mixed-use development that includes a 45,000-square-foot [4,000 sq m] Kroger and 139 market-rate apartments,” Brunner says. “Construction is scheduled for completion by September 2019.”

The city has more Fortune 500 company headquarters per capita than any metro area of similar size, says Bolton, and it benefits from a diversified economy and a strong manufacturing base. “Aerospace continues to be our jet engine; and with P&G, Kroger, and Macy’s headquartered here, we are a world leader in consumer marketing,” says Bolton. “Our biggest concern these days is getting large tracts of land ready and available for users who will bring hundreds of jobs to our region.”

Detroit-based McIntosh Poris Associates worked with Aparium Hotel Group to repurpose the former Detroit Fire Department headquarters and adjacent building, Pontchartrain Wine Cellars, into the 100-room, 95,000-square-foot (8,800 sq m) neoclassical Detroit Foundation Hotel. The $28 million project, which included repairing and restoring the facades of both buildings, was completed in 2017. (Jason Keen)


Like many other cities in the Midwest, Milwaukee is experiencing increased real estate activity in its CBD. Downtown Milwaukee is expected to add $3 billion to $4 billion in new commercial development over the next five years, including a new $524 million arena for the National Basketball Association’s Milwaukee Bucks, with the team owners expected to pump in another $500 million in area improvements, says Marquette’s Eppli. One of the newest developments is the $450 million, 1.1 million-square-foot (102,000 sq m), 32-story Northwestern Mutual Tower and Commons, completed in August 2017.

“It is keeping Northwest Mutual employees downtown,” adds Eppli. “Local realty firm Irgens’s 356,000-square-foot [33,000 sq m] 833 E. Michigan Street building opened in March 2016 and is approaching full occupancy. Prior to the 833 East and Northwest Mutual buildings, downtown hadn’t seen much new office development over the past decade.”

In November 2017, BMO Harris Bank and Irgens broke ground on the $133 million 379,000-square-foot (35,000 sq m) BMO Tower downtown. BMO Harris will lease 124,000 square feet (12,000 sq m).

Housing starts in the Milwaukee area have more than doubled in the past year, notes Thomas Miller, principal, housing and hospitality team leader at local design firm Kahler Slater. “We have many clients who are bullish on this sector,” he adds. “Even if the market this year isn’t as robust as 2017, it will still remain very strong. Retirees and those new to the urban workforce continue to create demand in walkable urban neighborhoods throughout the city.”

Among the residential projects under construction are the 192-unit 1550 N. Prospect apartment tower overlooking Lake Michigan and the adaptive use of the obsolete Park East Hotel into Vantage on the Park, a 96-unit luxury multifamily building. Both are designed by Kahler Slater.

Wisconsin’s hospitality market also remains healthy. “We have literally thousands of guest rooms on the drawing boards and have had over a dozen hotels in some state of construction over the course of the last year,” Miller says.

“Flags ranging from Marriott’s high-end boutique Autograph Collection to the ultra-efficient, millennial-focused Moxy are popping up in literally every Wisconsin urban center.”


Detroit has experienced a remarkable turnaround in a short amount of time thanks to a variety of economic drivers including athletics.

Olympia Development completed construction of the $862 million Little Caesars Arena in September. Owned by the Detroit Downtown Development Authority, the arena will house the Detroit Red Wings hockey team and bring the Detroit Pistons basketball team back to the city from Auburn Hills, Michigan, Schostak notes. The arena is in the District Detroit—some 50 blocks of businesses, parks, restaurants, bars, and event destinations that are expected to see more development. In addition, Quicken Loans founder Dan Gilbert, who moved the company’s headquarters and thousands of its team members to the 1 million-square-foot (93,000 sq m) downtown development that Peter Karmanos Jr., cofounder of Detroit-based Compuware—once the largest computer technology company in the state—built in 2003, continues to lead a revitalization of the urban core. Gilbert’s real estate arm, Bedrock, has invested several billion dollars downtown, including the redevelopment of the iconic J.L. Hudson flagship department store site into a mixture of office and residential uses that is expected to become the city’s tallest skyscraper at 800 feet (244 m). (Find more information on these Detroit projects in the Host City Focus package of articles that begins on page 110.)

“He’s acquired a lot of real estate downtown and used his clout and leverage to bring new tenants into downtown,” says Schostak. “Dan has led new office, retail, and entertainment projects and is retrofitting a ton of older, obsolete properties into 21st-century developments that are attracting millennials. Millennials are a big part of the movement downtown. Residential occupancies are at incredibly high levels—something we haven’t seen in downtown for decades.”

In addition, international pizza chain Little Caesars completed its $150 million, nine-story, 234,000-square-foot (22,000 sq m) world headquarters building downtown last year. The 290,000-square-foot (27,000 sq m) Albert Kahn Building—which opened in 1931—and the 634,000-square-foot (59,000 sq m) Max M. Fisher Building, finished in 1928, are undergoing a $100 million renovation, reports John DeGroot, vice president, research, at Newmark Knight Frank in the city. The $100 million renovation encompasses both buildings.

Even with all the activity downtown, Detroit is experiencing a shortage of office space. “Since 2012, Detroit’s CBD has absorbed just over 2.4 million square feet [223,000 sq m] of office space,” says DeGroot. “The level of demand has created a near scarcity of functional, modern office space; the vacancy rate for Class A space alone is just 7.7 percent.”

Job growth downtown is solid as more regional employers relocate their offices to attract talent. “The Detroit economy continues to perform well, driven by strength in the core automotive and manufacturing sectors and an impressive diversification into tech and finance,” says Jed Howbert, group executive for planning, housing, and development in the office of Mayor Mike Duggan. “Google recently announced that it is moving its regional office downtown, joining other major tech companies like Amazon, Microsoft, and LinkedIn that had already made or announced similar moves downtown.”

Adient, the Fortune 200 spin-off of Johnson Control’s automotive seating business, is relocating its headquarters downtown, Howbert adds. “Lear has already opened a major downtown innovation center, and Flex-N-Gate, Sakthi, and ArcelorMittal have all begun work on new or expanded manufacturing operations in the city,” he says.

Residential rents in the city center have been rising at around 10 percent a year for several years, reflecting a change in demand for urban living in the Detroit area. “This trend is only going to accelerate as the quality of life downtown continues to improve,” says Howbert.

Detroit officials are seeking to spread downtown’s revival to surrounding neighborhoods by stimulating development and increasing density. “We started by doing a neighborhood plan with deep community engagement to ensure that the neighbors feel a strong sense of ownership,” Howbert says. “We then rolled out a coordinated set of investments including streets, parks, retail, single-family, and multifamily. The objective is to take a comprehensive approach to increasing quality of life and to catalyze development with a handful of initial projects that we put public and philanthropic funds into.”

Detroit’s impressive turnaround resulted from unprecedented cooperation between the public and private sectors, says Schostak. “A combination of good government, an involved business community, and positive legislative activity led to the reinvention and redevelopment of the city,” he says. “It’s been mind-boggling how we got here as fast as we did. But the private and public sectors insisted on a better outcome and worked together to achieve it.”