Brown Deer approves financing deal to demolish office buildings for new apartments

The conversion of office properties into apartments is happening in the suburbs as well as downtowns, with Brown Deer approving a financing agreement for F Street to demolish unused buildings to clear land for 148 housing units.

That project planned for 4300 W. Brown Deer Road would level two office buildings, including one formerly used by Ascension, to clear 7.8 acres for the new apartments to be built. Clearing those buildings and adding the new apartments is expected to generate at least $23 million in new property value.

F Street intends to demolish the office buildings by the end of this year, according to an emailed statement Tuesday.

“We’re excited to partner once again with the village of Brown Deer on another multifamily development,” F Street said. “The development will include some commercial use space, so we look forward to announcing tenancy for that space in the future as we meet with potential suitors.”

Brown Deer’s Village Board on Monday unanimously approved a development agreement for public financing to support F Street’s project. The Village Board next month is to consider a tax incremental financing district that would be the source of the funding support.

The agreement includes a $2.6 million village loan to Milwaukee-based F Street to finance the property purchase and building demolitions. That money is to be repaid with interest once F Street completes its construction financing for the project.

F Street could also recover up to $6.28 million of the new property taxes generated by the project between 2024 and 2043. That amount is contingent on the building generating the expected amounts of new property value.

Pending final approvals for design and the closing on financing, the project could break ground as early as the second quarter of 2024, according to an emailed statement from Brown Deer community development director Nate Piotrowski.

Under its development agreement, F Street would complete the new apartments before the end of 2025.

The slowdown in the office market is leading to national interest in renovating downtown office buildings into apartments, and is creating opportunities for suburban redevelopment as well. Other examples in the region are the recent sale of the 100 East office tower in downtown Milwaukee, which resolved its foreclosure and sets the path for it to be renovated into apartments. Separately this week, an aging office building in the Bishop’s Woods office park in Brookfield sold for the Flats at Bishop’s Woods affordable apartment redevelopment.