The Business Journal of Milwaukee -- October 30, 2009

Chicago firm eyes Milwaukee for properties

by Pete Millard

A real estate investment group comprising some heavy and wealthy hitters based in Northbrook, Ill., is scouting for good deals on residential properties in southeast Wisconsin.

Michigan Avenue Real Estate Investors, a three-year-old company owned by Bob Judelson, Tom Meador and Jerry Reinsdorf, chairman of the Chicago White Sox and Bulls, is leveraging its experience and wealth by acquiring distressed undeveloped subdivisions, condominiums and apartments. The move by the group could help shake up the stagnant Milwaukee residential real estate market, which has been slowed in recent months by the current economic downturn.

“We’re seeking properties in good markets, in good locations and at good prices,” said Judelson, who also is a co-owner with Reinsdorf of the White Sox.

While Michigan Avenue Real Estate Investors has yet to close on a property in the Milwaukee area, Meador said he’s had several discussions with bankers and others about properties in southeast Wisconsin. The company placed a bid on a Dane County property earlier this year, but was outbid by a competing company, Meador said.

“Within five years we’ll have a meaningful presence in Milwaukee,” said Meador.

Reinsdorf is actually an inactive principal in Michigan Avenue Real Estate Investors. However, he was an active partner with Judelson and Meador in the 1970s and 1980s in Balcor Co., a Chicago real estate company that was sold to American Express for more than $100 million in the late 1980s.

Michigan Avenue Real Estate Investors, which represents more than a half-dozen high-net-worth families, has accumulated nearly $50 million in a fund that will give the company leverage to buy up to $200 million in distressed residential properties, Meador said.

Judelson and Meador would not disclose specific properties they are considering in the Milwaukee area. With several condominium projects mired in foreclosure proceedings, including the Park Lafayette and 606 West Wisconsin projects, and a handful of single-family home subdivisions, there is no shortage of possible acquisitions for Michigan Avenue Real Estate Investors.

In early October, Meador said, the company purchased 157 unsold condo units in Schaumburg, Ill., for $8.9 million. That puts the value of the units at $57,000, about half of what the original developer paid several years earlier.

“We’ll manage them as rentals and when the time is right, sell them,” he said.

Michigan Avenue Real Estate Investors expects to find the same kind of opportunity in southeast Wisconsin.