United States -  Milwaukee

Overview:

Located on the shores of Lake Michigan, Milwaukee boasts a diverse economy, with healthcare, education, services, insurance, and manufacturing, along with strong seasonal leisure visitation, as major contributors. A number of large companies in the area have an international customer base, which draws visitors to Milwaukee for training sessions and industry conferences. Furthermore, the presence of the University of Wisconsin – Milwaukee, Marquette University, and other higher-education institutions attract continuous demand from prospective students, visiting parents, and event attendees. Notable special events in the area include the annual eleven-day Summerfest, Harley-Davidson anniversary celebrations, Milwaukee Brewers and Bucks games, and the Wisconsin State Fair.

Major projects within the metro area include the $450-million, 32-story Northwestern Mutual Tower and Commons (currently under construction) and the $524-million Milwaukee Bucks arena, which recently broke ground and will anchor a $1-billion sports and entertainment district. Northwestern Mutual will employ an additional 1,900 people when its campus is fully developed in 2017. This growth has attracted the interest of hotel developers, and numerous lodging projects are in the works for the metro area. Despite several new hotels opening in the last three years, demand continued to outpace supply through 2014. Market-wide occupancy for the greater metro area remained relatively stable in 2015, with average rate increasing to $103.

Three significant hotel projects include the 158-room Kimpton Journeyman Hotel in the Third Ward, a 155-room SpringHill Suites hotel across from the Wisconsin Center, and a 220-room Westin a block away from the new Northwestern Mutual Tower. A Cambria Suites and a Homewood Suites by Hilton are also both in the planning stages. Additionally, several smaller hotels are proposed for development in surrounding suburbs. We anticipate the value of Milwaukee hotels to continue to increase modestly over the next three years.

Limited sales volume occurred in Milwaukee in 2014 and 2015, with eleven hotel sales recorded at a sales price averaging just under $55,000 per room. The majority of these sales were hotels near General Mitchell International Airport (MKE). The highest transaction was the Hampton Inn Milwaukee Airport, which sold in November 2015 for $6,150,000 or $71,078 per room.

* The HVI is an index, a statistical concept reflecting a measure of the difference in the magnitude of a group of related variables compared with a base period. As such, it is a measure of broad market trends, rather than a conclusion as to the specific value of any asset, and cannot be applied to an individual asset. A good comparison is the Consumer Price Index. While this index provides a reliable measure of the overall rate of inflation in a region, it does not indicate how the price of milk has changed at your grocery store. So how can the HVI be of use to an individual investor? Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent big picture data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Valuation Trends and Predictions:

Milwaukee United States
Previous Year -1% (59 of 71) +1% (49 of 71)
Growth in 2017 +0% (53 of 71) +2% (36 of 71)
Growth in next 3 years +5% (62 of 71) +10% (36 of 71)

Change In Value For Market:

Milwaukee RevPAR % Change

For more information, please contact:

Stacey Nadolny, MAI
snadolny@hvs.com
  • +1 419 367-3879 (w)
Dana Waud
dwaud@hvs.com
  • +1 312 505-5913 (w)
Justin Kaminski
jkaminski@hvs.com
  • +1 312 256-1057 (w)