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FEBRUARY 2024 VOLUME36 ISSUE2
Becoming an EV player? Gotion’s $137 million purchase of former Kmart warehouse a big win for Illinois’ electric vehicle plans Page 10
Midloch’s view: Expect a stronger year for multifamily sales in the Midwest throughout 2024 By Dan Rafter, Editor
Midloch recently sold its Villa Medici multifamily property in Overland Park, Kansas. This property contains 166 rental apartments and townhomes. (Photo credit: CBRE.)
W
ith offices in Chicago, Milwaukee and the Minneapolis suburb of Eden Prairie, Midloch Investment Partners understands the multifamily market across the Midwest. And what do Midloch investment pros expect to see in this sector throughout the rest of 2024? A better year for investment sales and another strong year for leasing demand. We spoke with Tim Donovan, managing director of Midloch Investment Partners, about the resilience of this sector and why he expects to see more multifamily sales in his favored Midwest markets this year. Here is what he had to say. A jump in sales activity Donovan says that once the Federal Reserve Board late last year indicated that it was done increasing its benchmark interest rate, it immediately boosted the odds that the multifamily sector would see increased sales activity in 2024.
Donovan said that an environment of stable interest rates should inspire more investors to purchase multifamily assets this year. But as far as interest-rate cuts go? Donovan said that he’s not entirely certain that the Fed will deliver as many cuts as some in the commercial real estate industry expect. “The sentiment is that 2024 will be a better year with increased transaction activity compared to 2023,” Donovan said. “Of course, we are starting with a bit of a low point with 2023. A lot of people are expecting multiple interest-rate cuts this year, maybe as early as late spring. We are more cautious and not overly optimistic that we’ll see cuts. But we do think the fact that rates won’t be going up will result in more multifamily sales.” There’s another important factor in play, too, the high number of multifamily loans maturing in 2024. Donovan said that roughly 20% of outstanding commercial real estate mortgages are set to mature this year, a number that’s so high partly because lenders granted so many extensions in 2023.
MILWAUKEE
Milwaukee CRE market poised for a rebound year in 2024? Signs are pointing to it By Dan Rafter, Editor
As in all major Midwest markets, Milwaukee’s commercial real estate sector faced plenty of challenges in 2023. High interest rates led the way, slowing commercial sales and development. The city’s office market continued to struggle thanks to the number of employees who are still working from home. Then there were the struggles contractors faced with high materials costs and a tight labor market.
MULTIFAMILY (continued on page 16) MILWAUKEE (continued on page 14)