Brokers: Interest in Janesville's industrial vacancies strong

By JIM LEUTE ( Contact )   Thursday, Aug. 18, 2011
ADVERTISEMENT
 

Photo

Jeffrey W. Helgesen

Photo

Bill Mears

Photo

Mike Venable

PhotoVideo


The Helgesen Industrial Center at 2929 W. Venture Dr. in Janesville.

The Helgesen Industrial Center at 2929 W. Venture Dr. in Janesville.

PhotoVideo


The former Menards building at Humes Rd. and Pontiac in Janesville.

The former Menards building at Humes Rd. and Pontiac in Janesville.

PhotoVideo


212 E. Conde in Janesville

212 E. Conde in Janesville

PhotoVideo


The Former Gilman/Thyssenkrupp building at 305 W. Delavan Drive in Janesville.

The Former Gilman/Thyssenkrupp building at 305 W. Delavan Drive in Janesville.

PhotoVideo


Former Unisource at 505 S. Wuthering Hills Dr. in Janesville.

Former Unisource at 505 S. Wuthering Hills Dr. in Janesville.

PhotoVideo


The former CB&K at 3939 Whitney St. in Janesville.

The former CB&K at 3939 Whitney St. in Janesville.

— While the interest is certainly there for vacant commercial property in Janesville, signed leases are not.

Brokers and economic development officials said that could change in the coming months as business owners become more comfortable in a market that’s been dogged by economic and government uncertainty.

“The interest is strong—certainly stronger than it was a year ago at this time—but what’s not so strong is decision-making,” said James Otterstein, Rock County’s economic development manager.

The interest, Otterstein said, is coming from a variety of industrial sectors.

There’s been plenty of tire kicking, and Otterstein and others are confident deals will come to fruition before the end of the year.

“On the industrial side, I’m encouraged,” said Mike Venable, a principal with Commercial Property Group in Janesville. “Deals are closer to getting done, and there definitely is stuff in the works.”

In normal times, Janesville has a vacancy rate of about 7 percent in its commercial buildings, said Bill Mears of Coldwell Banker Commercial McGuire Mears and Associates.

He estimates the current industrial vacancy rate at about 15 percent. That doesn’t take into account more than 4 million square feet of vacant industrial space previously used by General Motors.

“Do we want vacancies? Yes, but our biggest problem right now is we have a lot of vacancies on big buildings,” Mears said. “What’s hard to find are those properties in the 30,000- to 40,000-square-foot range.”

In fact, Janesville has several buildings available that are 100,000 square feet and larger.

The granddaddy of them all is the Helgesen Industrial Center, a 700,000-square-foot building on the city’s south side. It’s the former home of a GM supplier, and owner Jeff Helgesen has completely refurbished and upgraded the facility.

Helgesen said he’s had “enormous” interest in both that building and the 110,00-square-foot vacant building he owns on Wuthering Hills Drive.

In fact, he said, two deals that would have brought hundreds of jobs to the community have fallen through at the last minute, one when a union made concessions to keep an employer in Milwaukee and the other when a federal grant was delayed indefinitely.

Helgesen believes that on Venture Drive he has the perfect building for large-scale manufacturing, but he’s now in a position where he must consider leasing the building piecemeal.

On his desk sits a lease that he has yet to sign for about one-third of the facility.

“I want to use that building to its fullest capacity, but at some point I have to start seeing some revenue,” he said. “I’m paying $510,000 a year in property taxes on an empty building.”

While landing a large-scale lessee is more difficult to do, Venable said that the smaller facilities are more in demand right now. But, he said, the city doesn’t have an adequate inventory.

“I get emails all the time from people looking for a 20,000- to 40,000-square-foot building,” he said.

There just aren’t any.

“We’ve got wide open buildings at 100,000, 200,000 and up to 700,000 square feet, but not the smaller ones,” Venable said.

That raises the question: Should somebody be building facilities that size to meet the demand?

“I’ve had that conversation with several people, and it’s pretty tough right now for people to dig into their pocket for $500,000 or $1 million to build a building and hope it’s going to work,” Venable said.

Otterstein said Janesville vacancies are competing with facilities in Milwaukee and Chicago, where base rent has been cut to the bone.

Venable said all communities are competing with one another, but he likes his geography.

“This market has it all,” he said. “Rail, air, the interstate, it has a great logistical presence in the middle of Milwaukee, Chicago and Minneapolis.”

The local market will rebound, he said, but it’s a matter of time.

“From Madison to Beloit, we’re seeing a steady stream of interest,” he said. “I’m encouraged.”

Mears and Venable said the caution that’s been hampering the industrial market might be even more pronounced on the office and retail market in Janesville.

Both men said that vacancy rate is higher than normal.

“The smaller companies are still nervous and are not taking the next step,” Venable said.

reader COMMENTS
Click here to view reader comments
(19)
justaname
Sep 15, 2011 at 3:57 p.m.
Suggest removal

"mistergee1" Your comment about potential companies sitting on the fence is exactly right. This because the debacle the lefties have made in this state. Job creating industries are no-doubt reluctant to move their business into a state who is condemned with lefties who make it seem like WI wants nothing to do with "big business". You are all so blinded by your own smug beliefs that you fail to realize that a business friendly state WILL bring business's and thus job creation. These corporations will(and have gone!) go where they can conduct business without a bunch of unrealistic hippies harassing them and the governor that is trying to pass favorable laws to bring/keep big business in WI. You may not like corporate tax cuts, but I'm sure you won't like the bleak future this state and country is facing because of the "debacle" people like yourself have created. Your ideals are driving business over seas or to business friendly states. Wake up people!!

kiowamohican
Aug 23, 2011 at 2:33 a.m.
Suggest removal

I always get a laugh at these stories. Almost every huge industrial building I have ever seen shut down, is sitting there for DECADES. Look at the old Chrysler plant in Kenosha. A good 3/4 of that place has been vacated for two decades. Look at the Motorola plant in Harvard...Vacated a good decade. Look at places like Gary, IN, or Detroit. You have COUNTLESS old industrial buildings, which occupy massive acreage, that have been vacated for decades, and literally just falling to rubble now. No doubt all those places had "ENORMOUS" interest in them to. Heck; I could ride my bike by one of these desolate places. Use my machete to cut away the weeds so I can see the phone number on the "For Lease" sign...Call the # on the sign, blow smoke up someones butt about my grand business plan, and that would qualify is enormous interest.

jv93
Aug 20, 2011 at 2:55 p.m.
Suggest removal

I find it odd that the savior's most recent campaign bus trip did not include WI. Maybe He did not wish to return to Janesville after He stood in the Janesville GM plant and promised that cars would be built there for many years to come. I find it humorous how Obama has any supporters in Janesville at all after he was effectively running GM for how long and yet despite having total control of GM refused to force the GM plant to reopen.

freedomfighter608
Aug 20, 2011 at 9:40 a.m.
Suggest removal

Is this interest before of after the huge increase in the property value, that was leveled against all businesses in the city? Those prospective companies, large and small, will be looking somewhere else in the State to open up.

mistergee1
Aug 20, 2011 at 9:04 a.m.
Suggest removal

Seems that the left might be right....no anouncement or press release from the state of Fitzwalkerstan about the jobs lost, yet there was a lot of hype about the temp jobs. Hmm could it be that we are not truly open for bussiness as told? Couple that with the fact that both fitzgeralds refused to meet wiith the dems at walker's dinner means a thing or two.
Could they be so out of touch with reality as to not realise the whole country is watching this debacle? I think so. Watch out in January, as this might be a different tune.

RustyRotor
Aug 19, 2011 at 2:31 p.m.
Suggest removal

As you can see, those who bend left have no clue.

candyapplered
Aug 19, 2011 at 12:13 p.m.
Suggest removal

Oreally; and thirdly, the GM plant is the property of - wait for it - General Motors. Walker, or anyone else for that matter, is not in a position to put any "tenants" in that facility

tiredofhearingit
Aug 19, 2011 at 11:13 a.m.
Suggest removal

Oreally: 1st of all, property is NOT taxed on its value as a business but rather the value of the Real Estate itself. Do you think Menards taxes went down after vacating - if you do you have no idea how the system works. Secondly, its Not Scott Walkers job to "line up" new business - its his job to create a business friendly environment for business to relocate or grow, which he is doing if you'd let him!

Oreally
Aug 19, 2011 at 11:08 a.m.
Suggest removal

Not to belabor the point, but I was amazed to find a whole article that spends a lot of words describing what's not happening in business. Makes me wonder what's not happening in other aspects of the community.

Oreally
Aug 19, 2011 at 10:59 a.m.
Suggest removal

The GM property lost three-quarters of its value after operations shut down. So it really isn't much of an asset to the city as is. It's a ghost. Folks should call Scott Walker and remind him that Wisconsin is open for business. What new tenant does he have lined up for the premises, and when will operations begin?

Oreally
Aug 19, 2011 at 10:53 a.m.
Suggest removal

This article seems to be what business reporting boils down to: not much business. The real news (not available on this website, of course) is that Wisconsin lost 12,500 jobs in July, despite "being open for business." To date, the Walker administration is a failure. It stirred up a hornet's nest in the state while failing to elicit any positive attention.

frogger
Aug 19, 2011 at 8:48 a.m.
Suggest removal

"Brokers: Interest in Janesville's industrial vacancies strong"
Is this why we are building some more strip malls?

They pay property tax and with that chunk that should be a large enough tax creit to not have to pay Federal tax. I think federal tax is the tax they "don't pay"

tiredofhearingit
Aug 19, 2011 at 7:05 a.m.
Suggest removal

Isn't SOME rent better than NONE??? - EXACTLY why last weeks article about 2 strip malls being build made me laugh, a lot of comments were complaining about that we have too many. Now maybe those critics will understand - with 3 or 4 spaces in a parcel, at least 1 or more rented will help pay the mortgage & taxes.

unclesmoothie
Aug 19, 2011 at 6:19 a.m.
Suggest removal

Speaking of partitions, Isn't Hufcor the worldwide leader in that area? Support a local business and toss some work their way!

baegucb
Aug 18, 2011 at 8:11 p.m.
Suggest removal

GM is probably paying property taxes with the money Doyle gave GM to keep jobs here.

jv93
Aug 18, 2011 at 7:55 p.m.
Suggest removal

I thought those evil corporations didn't pay taxes? We need to sock it to em so they will bring jobs here.

mgcarguy
Aug 18, 2011 at 7:39 p.m.
Suggest removal

If Helgesen is paying $ 510,000 taxes on a 700,000 square foot building, what is General Motors paying on a 4,000,000 square foot building ? Then of course there is the 12% increase in property values that was reported. Sounds like Janesville should be in pretty good shape.

truth1
Aug 18, 2011 at 4:49 p.m.
Suggest removal

Maybe "stimulus money" could put in some partition walls.....oh, wait, that would create jobs and "stimulus" was for vote-buying...Silly me.

truth1
Aug 18, 2011 at 4:38 p.m.
Suggest removal

Anyone ever heard of a partition wall???
.
Isn't SOME rent better than NONE???

Before you post a comment, consider this:

Note: GazetteXtra.com does not condone or review every comment. Read more in our User Policy Agreement
  • Keep it clean. Comments that are obscene, vulgar or sexually oriented will be removed. Creative spelling of such terms or implied use of such language is banned, also.
  • Don't threaten to hurt or kill anyone.
  • Be nice. No racism, sexism or any other sort of -ism that degrades another person.
  • Harassing comments. If you are the subject of a harassing comment or personal attack by another user, do not respond in-kind.  Hit the "Suggest Removal" button on offensive comments.
  • Share what you know. Give us your eyewitness accounts, background, observations and history.
  • Do not libel anyone. Libel is writing something false about someone that damages that person's reputation.
  • Ask questions. What more do you want to know about the story?
  • Stay focused. Keep on the story's topic.
  • Help us get it right. If you spot a factual error or misspelling, email newsroom@gazettextra.com or call 1-800-362-6712.
  • Remember, this is our site. We set the rules, and we reserve the right to remove any comments that we deem inappropriate.

Post Comment

Commenting requires registration.

Username:
Password: (Forgotten your password?)

Comment:

ADVERTISEMENT