Sarah Eldred, Broker Associate at Mid-America Real Estate, spoke with Dan Rafter, editor of Midwest Real Estate News
and Minnesota Real Estate Journal
, about retail in the Milwaukee market:
Midwest Real Estate News Article
Story by Dan Rafter
Smarter. More efficient. Ready to grow. Are these all ways to describe those retailers who have survived the COVID-19 pandemic?
It looks like it.
Across the Midwest, those retailers who have worked through the pandemic are now entering growth mode. And that’s benefitting both downtown and suburban areas.
A good example? Milwaukee, where retailers are opening new locations in both urban and suburban neighborhoods.
Sarah Eldred, broker associate in the Milwaukee office of Mid-America Real Estate Wisconsin, said that she sees more energy in the retail sector in her market today, whether in the urban areas of Milwaukee or its suburbs.
“We are seeing a resurgence in the number of retailers that are opening stores or relocating stores to a more optimal space,” Eldred said. “Everything is heading in a positive direction in Milwaukee.”
And the best news? This resurgence is happening with several types of retailers, Eldred said.
Quick-service restaurants, as they have throughout the COVID-19 pandemic, are thriving, Eldred said. But bigger retail deals are happening, too. Eldred pointed to grocery store Hy-Vee’s plans to move into the former Shopko Space at Bay Park Square Mall in Green Bay, Wisconsin. Then there is Steinhafels Furniture, which earlier this year moved into a former Younkers store at the same mall in Green Bay.
“Retailers are getting creative today,” Eldred said. “You have this new competitiveness and energy in the market for retail. These developers are feeling confident. They have tenants lined up for these projects.”
Other retailers are firmly in expansion mode. An example? Sweetgreen, a fast-casual restaurant chain specializing in salads. Mid-America is working with the chain as it continues its quick expansion throughout the Midwest. Eldred said that the chain plans on opening several new locations in this region throughout 2023 and 2024.
And sweetgreen isn’t alone. Eldred said several retailers are now ready to boost their number of locations.
“I think that during COVID, in 2020 and 2021, retailers were a bit more conservative,” she said. “They were focusing on their existing stores and getting through those challenging times. Now retailers have become faster, better and more efficient. They know their strong points. Everyone learned a lot during COVID. Retailers are excited and confident. They are ready to keep growing.”
Consumers’ habits changed during the pandemic. Many who had never ordered online have now embraced this practice. Retailers have caught onto this and are boosting their online capabilities, keeping the curbside pick-up and enhanced delivery options they offered throughout the pandemic.
Quick-service restaurant Chipotle is a good example of this. The chain is now offering drive-through restaurants in which consumers order their items online and then drive to the drive-through lane to pick it up. The drive-through restaurants don’t take new orders on-site, a way to keep the lines moving faster. Sweetgreen is offering a similar service.
“Chick-fil-A and Starbucks que lanes are long, stretching into the parking lots surrounding these buildings,” Eldred said. “Drive-throughs will get better as retailers tweak them. They will improve to accommodate everyone going through them.”
Retailers have also learned that they need both a physical and online presence to maximize their sales. Many are using their brick-and-mortar locations to entice customers, showcasing their products to potential buyers. Many of these buyers might not buy while they’re in the store but will instead order items from the same retailer’s online storefront.
This omnichannel approach has proven successful for retailers across the Midwest, Eldred said.
Some former big-box stores, which have become outdated, are being transformed into other uses, Eldred said. This also helps the local retail market by eliminating outdated space that is difficult to fill.
The former Boston Store in the Southridge Mall in the Milwaukee suburb of Greendale is a good example. Late last year, the village board approved plans to demolish the vacant store and replace it with an apartment development with 800 units.
And in Brookfield, another suburb of Milwaukee, developer Irgens will raze another vacant Boston Store and build mid-rise office buildings on the site.
Signs of life in downtown?
Retailers were hit harder by the pandemic in urban areas, and especially in the downtowns of large cities. This isn’t surprising: With so many employees working from home, there weren’t nearly enough people eating lunch, buying clothes or ordering drinks from downtown retailers.
But what about today? As some companies begin slowly bringing their workers back to the office, are retailers seeing more signs of life in downtowns across the Midwest?
Eldred said that she is seeing more energy and more people in downtown Milwaukee. And she has a good perspective. She has been working in her office in downtown Milwaukee since about three months into the COVID-19 pandemic. Eldred, then, has been able to track the slow, but now steadier, increase in foot traffic in downtown.
“Milwaukee is a little bit different than some of the bigger cities,” Eldred said. “We are a big small city. You can live in the suburbs and get to the Third Ward downtown in 10 minutes, have a great dinner, go to Restoration Hardware or Anthropologie and then head back home without much hassle. It’s not like Chicago where everything is so spread out. That is helping us bounce back a little faster in our downtown.”
Eldred said that Milwaukee and Wisconsin are also a good fit for retailers looking to expand. Not only is downtown Milwaukee a strong market, there are also several bustling suburbs surrounding the city, Eldred said.
And the Milwaukee market doesn’t suffer from extreme highs and lows, Eldred added. She called it “slow and steady,” an apt description for many of the markets across the Midwest.
“Sometimes that slow and steady type of activity is better than the opposite,” Eldred said. “Milwaukee is a great place for employers. It’s a wonderful place to live. There is a lot of variety here in terms of outdoor activities and entertainment. When the Bucks won the NBA championship last year, it was amazing to watch the parade come downtown and past our office. There are a lot of positives happening here.”