There might never be a better time for commercial real estate development.
“Real estate fundamentals are very strong,” says Michael W. Brennan, keynote speaker at InDevelopment 2017, where more than 225 gathered at the Oshkosh Convention Center. “They’re some of the best we’ve seen in a long time.”
Brennan, Irgens executive director of the James A. Graaskamp Center for Real Estate at UW-Madison and co-founder, chairman and managing principal of Brennan Investment Group, says since 2010, we have witnessed the “fall and rise” of the American economy.
He identified three contributors to that fall and rise: automobile production, the housing market and stock markets. All three have shown robust growth, he says. In addition, GDP and consumer confidence are going strong.
“I have tremendous optimism for the nation’s economy based on the things I’ve seen as a businessperson,” he says.
Positive trends extend outside of the United States, he says, despite conflicts in the world. “Forty-six out of 50 countries by the end of 2016 had positive GDP growth,” he says. “That’s phenomenal.”
Brennan did identify “headwinds” the U.S. economy faces, including a strong dollar, which hurts exports, higher interest rates, higher gas prices, a slightly slowing housing market and “burning off of the pent-up demand in auto.”
In addition, he says questions remain about the Trump presidency. Brennan sees positives in proposed infrastructure spending, less regulation and lower income taxes. As for possible concerns, he cites Trump’s protectionism, the Affordable Care Act repeal, immigration reform and deportation, and foreign policy protocol.
Brennan’s observations about a strong economy bear out for Oshkosh. Jason White, CEO of the Greater Oshkosh Economic Development Corp. led a developer briefing and outlined plans for the city’s Sawdust District.
Oshkosh enjoys a low unemployment rate, and with the news of the city landing the Milwaukee Bucks D-League team, the stage is set for revitalization in the Sawdust District. “You don’t have to look very far to find good news anywhere, and that certainly is true in the Oshkosh-Neenah, greater Oshkosh area,” White says.
The city wants to continue to increase residential development, White says. Oshkosh took the “decaying eyesore” that was the Buckstaff property and redeveloped it into an area with the potential for a future entertainment district, an office park and a revamped Pioneer Inn & Resort.
Greg Pierce, president and chief investment officer of Windward Wealth Strategies and leader of Fox Valley Pro Basketball, started by answering people’s burning questions: Yes, the Bucks are coming; yes, the arena will be completed in time for the season opener in November; the team will have a name and logo soon.
“’Are you insane for doing this project?’” he jokes. “Maybe, but I don’t think so. ‘And are you going to play for the basketball team?’ That’s an I doubt it.”
Pierce says sports can be a “catalyst for growth.” The arena could host conventions, concerts and other sporting events. “I don’t care what it is,” Pierce says. “We can do it, and we will be open for business in November.”
The day’s talks finished with a discussion of historic tax credits. Todd Hutchison of Wisconsin Redevelopment LLC has taken advantage of the credits for five different projects since 2013, including the Artist Lofts in Manitowoc.
In 2013, Wisconsin went from a 5 percent historic tax credit to a 20 percent credit. With the $9.5 million project in Manitowoc, his company converted a former Mirro building into the Artist Lofts, which became 40 loft-style apartments and an art gallery.
Hutchison’s company claimed millions of dollars in credits between the federal and state historic tax credits. He advised others considering taking advantage of the credits to seek expert help from professionals. “You can do the whole development and lose everything if you don’t do it correctly,” he says.