Graphic: How do rent rates compare in Milwaukee’s hottest neighborhoods?
The wave of construction underway in Milwaukee is providing welcome relief to renters searching for housing.
Developers are busy adding new product to the Milwaukee metro to satisfy pent-up demand in a market where vacancies across all submarkets are below 5 percent. An estimated 2,000 new units were completed in 2015, which is the highest level since 2008, according to a Q4 2015 Milwaukee Apartment report by Marcus & Millichap. And there is even more on the way with 3,300 units under construction as of fourth quarter and another 7,500 proposed with tentative completion dates in 2016 and 2017.
For the most part, construction has been concentrated in downtown, as well as the neighborhoods and suburbs immediately to the north. Like much of the rest of the country, Milwaukee has seen a surge in interest from millennials and empty nesters who are looking to live in or near the urban core. In Milwaukee, there were some 1,256 new multifamily units built downtown from 2012 to 2014 with another 765 apartment units under construction in 2015, according to the Milwaukee Business News.
The Corners at Brookfield is the largest project currently under construction. The 235-unit luxury apartment project is part of a $200 million mixed-use retail located in Brookfield, Wis.
The Mandel Group recently completed the third phase of its North End development at Water and Pleasant streets. The third phase features 168 apartments and a Fresh Thyme Farmers Market.
Northwestern Mutual is proposing a 25-story, 308-unit luxury apartment tower next to its downtown headquarters. The company expects to break ground in March.
Cobalt Partners plans to start construction this summer on a large mixed-use project proposed in Greenfield. The project includes 400 new apartments, as well as a hotel, office and retail space.
So far, there seems to be ample demand for the new apartments that are being built. Vacancies inched only slightly higher in 2015 to end the year 10 basis points higher at 3.1%, according to Marcus & Millichap. That demand can be attributed to a strong renter pool that includes factors such as:
- Population of 940,000 for Milwaukee County
- Unemployment rate of 4.1%
- 10,000 new jobs added in 2015
- 6,100 new households created in 2015
Milwaukee also is home to a number of colleges and universities that make a significant contribution to the area’s pool of renters. The three largest schools are the University of Wisconsin-Milwaukee, Marquette University and Milwaukee Area Technical College, which combined serve more than 60,000 students. Currently, there are 3,054 rental properties within a 2-mile walk of those college campuses, according to ABODO.
ABODO data shows that rents on student apartments have actually declined in 2015, most likely due to the new construction that is occurring. As of December, rents at both Marquette and MATC were fairly comparable, while rents were slightly lower near the University of Wisconsin-Milwaukee campus.
Marquette University: Average 1 BR Rent – $802
Milwaukee Area Technical College: Average 1 BR Rent – $796
UW-Milwaukee: Average 1 BR Rent – $778
Although concessions have returned to help speed lease-up on the new properties, effective rents in the broader Milwaukee metro rose 3.3% in fourth quarter to average $968 per month, according to Marcus & Millichap. That increase is due in large part to the higher rents being charged at the new projects, many of which are high-end or luxury apartments that cater more towards young professionals and empty nesters.
Milwaukee Metro: Average Price by Size
1 Bedroom: $774
2 Bedrooms: $1,054
3 Bedrooms: $1,168
4 Bedrooms: $2,525
5 Bedrooms: $2,872