Commerical Building Is Strong in Madison, Wisc.'s Suburbs

Approximately $500M of non-residential starts in Madison and Dane Co.

Aug. 11--If you're out in search of construction crews putting up a new row of stores or an office building, look no farther than Madison's suburbs.

There's just as much commercial building under way outside the city as there is within Madison now -- in fact, a little bit more.

"It's not surprising," said Michael Reisinger, vice president of brokerage services for commercial real estate firm CB Richard Ellis in Madison.

"Look at some of the business parks in Fitchburg or all the activity out in Middleton. Those areas are really not (seen as) too far out now," Reisinger said.

In Madison, $248 million worth of nonresidential construction got under way in the past 12 months. That's slightly less than the $261 million worth of projects that began during the previous 12-month period.

Throughout the rest of Dane County, though, $250 million worth of nonresidential projects broke ground during that period, slightly more than Madison's figure, State Journal research shows.

The totals are based on major projects valued at $500,000 or more in building permits issued between July 1, 2005, and June 30, 2006. They don't include retail areas within new housing developments -- such as the Trader Joe's grocery store that will be part of Monroe Commons -- or projects being built by the state or UW-Madison.

"The cost of construction certainly has gone up, but those are healthy numbers," Reisinger said. "I think things are extremely healthy."

In Madison, now that the five-year, $210 million Overture Center construction has wrapped up, the city's largest nonresidential project is the St. Mary's Hospital expansion, a plan that will stretch more than 10 years and cost $174 million. During the past 12 months, permits were approved for about $90 million worth of construction, including an addition to the hospital's power plant.

In the suburbs, medical records technology developer Epic Systems' $150 million campus in Verona continues to lead the pack. The latest portion of the project, which received a permit in the past year, is valued at $50 million.

Focus on Fitchburg

Fitchburg was Dane County's No. 1 spot -- outside Madison -- for commercial construction starts over the past 12 months, with $72 million worth of major projects.

For a city that's one-10th the size of Madison, Fitchburg alone had enough new offices and stores going up to equal more than one-fourth the value of Madison's nonresidential building starts during that time period.

Why is Fitchburg so hot?

"Location, location, location," said John T. Crook, Fitchburg's building inspector. "We are halfway in between (Madison's) East Side and West Side."

Crook also credits the favorable tax climate and aggressive business development office in the city of 22,000 along Madison's Southwest Side.

The result was a mix of projects, from the $13.4 million addition at Sub-Zero for manufacturing wine refrigeration units, to the $14 million Ellen and Peter Johnson HospiceCare Residence, to the $16.5 million Town Center building in the Fitchburg Center, which will house, primarily, an expansion of the area's biotech pioneer, Promega Corp.

"I think it's land availability," Reisinger said. "If you look at Madison and the ability to buy land -- to build either an office building or some type of service or flex building -- the availability of sites is not real high in Madison."

Middleton has also benefited from that, he said.

Commercial construction in Middleton totaled $50 million between July 2005 and June 2006. Several restaurants, a UW Health plastic surgery clinic, a $9.9 million Courtyard by Marriott hotel, expansion of technology company Standard Imaging, new facilities for Schoepp Motors and a $4.75 million Lexus dealership were just some of the projects that got under way.

Major building projects also broke ground on the UW-Madison campus, such as the $143.9 million Interdisciplinary Research Complex, the $120.9 million Microbial Sciences Building and the $190 million University Square development, which will feature apartments, offices, stores and underground parking.

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