A Knowledge Leader Publication.
CITIES OF OPPORTUNITY
Accelerating success.
CITIES OF
OPPORTUNITY
MILWAUKEE
TORONTO
CHICAGO
HAMILTON
Night time light emissions detected by NASA’s Suomi NPP
satellite
Night time light has been used as a proxy for urban development. These
maps visually outline the connectivity of the Chicago and Milwaukee
regions, along with the Toronto and Hamilton regions. Both Hamilton
and Milwaukee are positioned at opposite ends of much larger primary
anchor cities, beyond the Chicago and Toronto suburbs.
SPARK | CITIES OF OPPORTUNITY
Image courtesy of the NASA Earth
Observatory. Image created by Robert
Simmon, using Suomi NPP VIIRS data
provided courtesy of Chris Elvidge.
(NOAA National Geophysical Data Center)
The overall size and increasing growth of the metropolitan Toronto, Vancouver, and Montreal areas
has been discussed for many years. The dialogue has recently gravitated towards the shift of people
and businesses within the metro to the downtown neighbourhoods of these cities. With rising costs and
infrastructure strains – such as long commute times – associated with locating in large cities such as
Toronto, firms have an opportunity to locate in a medium-sized anchor city. This report analyzes five
attributes Colliers has identified that make Hamilton and Milwaukee attractive anchor cities.
Companies on the move should consider
secondary medium-sized anchor cities
with the following five attributes to improve
their balance sheet and attract/retain the
best employees: low costs, highly skilled
labour, redevelopment opportunities,
commute times, and amenities. This mix of
attributes have recently made it attractive
for Northwestern Mutual to build a new,
larger downtown HQ in the medium sized
anchor city of Milwaukee, migrating away
from their old suburban location.
1. Low Commercial & Residential Costs
Competitive average rents, commercial
taxes, and development charges are all costrelated factors that are important for midsized anchor cities to attract companies.
Other cost factors such as residential
affordability are becoming increasingly
valuable locational determinants.
In a megalopolis or metroplex, anchor cities are often referenced
as the principal cities within the region. For example the Chicago
and Milwaukee metropolitan areas combine to make a metroplex,
in which the two anchor cities are Chicago as the large, primary
anchor city and Milwaukee as the medium sized, secondary
anchor. 1 A medium sized city consists of a population between
100,000 and 999,999 people. 2
COLLIERSCANADA.COM/RESEARCH
5 Attributes of
ATTRACTIVE ANCHOR CITIES
3. Redevelopment Opportunities
In most medium-sized anchor cities,
especially those that are deindustrialized,
attractive redevelopment inducements are
needed to upgrade the current office stock,
along with relocation incentives through
government programs to help attract
certain businesses.
POPULATION: 2,718,782
SHARE OF RESIDENTS
WITH A BA+: 34%
Public infrastructure, primarily commuter
infrastructure impacts business location
decisions as access to roadways, highways,
public transit, and bikeways can give a
particular location a competitive advantage.
Commuting times and transportation
availability are crucial attributes when
choosing to locate in a medium-sized city.
TOTAL
POPULATION:
3.3 MILLION
With these five attributes, medium-sized
cities that are anchored to a megalopolis or
metroplex have an opportunity to become
increasingly attractive to a wide range of
businesses.
POPULATION: 2,576,025
DRIVE DISTANCE:
1 HOUR
PUBLIC TRANSIT
DISTANCE:
1 HOUR 10 MINUTES
UNEMPLOYMENT
RATE: 6.9%
5. Amenities
In this report, Colliers also recognizes the
importance of local amenities. Companies
have been putting increasing value on local
amenities when choosing a location, as
amenities are deemed important by the type
of employees that many firms are trying to
attract.4 As referenced by Livability.com,
being part of a livable city means more
than just having a nice house and hanging
out on your deck. It’s about having things
to do, places to do them and a decent
climate to do them in. In other words, in a
great community, people engage with that
community.
PUBLIC TRANSIT
DISTANCE:
1 HOUR 45 MINUTES
SHARE OF RESIDENTS
WITH A BA+: 33%
DISTANCE TO HAMILTON: 70 KM
4. Commuting
CLASS A
OFFICE RENTAL
RATE (PSF): $40.30
<
TORONTO
DRIVE DISTANCE:
1 HOUR 30 MINUTES
<
CHICAGO
Proximity to educated individuals, talented
professionals, and skilled workers within
similar industries has become more
essential as a locational imperative.3
DISTANCE TO MILWAUKEE: 148 KM
2. Educated Labour Force
SHARE OF RESIDENTS
WITH A BA+: 22%
UNEMPLOYMENT
RATE: 5.6%
TOTAL
POPULATION:
3.0 MILLION
UNEMPLOYMENT
RATE: 7.6%
MILWAUKEE
POPULATION: 599,164
CLASS A
OFFICE RENTAL
RATE (PSF): $53.78
HAMILTON
POPULATION: 509,635
CLASS A
OFFICE RENTAL
RATE (PSF): $27.17
SHARE OF RESIDENTS
WITH A BA+: 22%
CLASS A
OFFICE RENTAL
RATE (PSF): $15
UNEMPLOYMENT
RATE: 5.6%
Sources: 2013 US Census Bureau State and County QuickFacts and the 2011 Statistics Canada National Household Survey.
City level data is used throughout the exhibit except for the unemployment rate, which uses 2015 Metropolitan area data.
SPARK | CITIES OF OPPORTUNITY
COLLIERSCANADA.COM/RESEARCH
Case Study - Milwaukee, Wisconsin
Milwaukee, a medium-sized city located
on the northern periphery of the Chicago
metropolitan area and within the
Milwaukee-Chicago metroplex, provides
a case study of a successful mid-sized
secondary office market. The city has
historically struggled with high office
vacancy rates after deindustrialization.
Milwaukee has recently become appealing
for companies due to numerous factors,
including the five attributes this report
identified.
1. Costs
Lower costs for high quality office space
is one factor that makes Milwaukee
attractive. The average Class A space
in Milwaukee is about $27.17 USD per
square foot (SF), compared to $40.30
USD in Chicago.5 Milwaukee is also
attractive to firms that place importance
on affordability for their workforce. The
median sale price for a home in Milwaukee
is about $117,300 USD, compared to
$249,600 USD in Chicago.6
2. Labour
Milwaukee has a high quality labour
force thanks in part to Marquette
University and the Milwaukee School
of Engineering being located within the
City. Many individuals in Milwaukee’s
labour force are also currently working
in management, business, science, and
arts occupations. This “deep talent pool”
was mentioned as a contributing factor
for Gardner Denver’s global headquarters
recent move to downtown Milwaukee,
according to their CEO.7
SPARK | CITIES OF OPPORTUNITY
3. Redevelopment
Milwaukee’s large amount of brownfield
land resulting from deindustrialization
required redevelopment policies and
incentives to meet the demands of
today’s office leasing businesses. The
Menomonee Valley redevelopment plan,
converting land into light industrial
and flex office space, is an example
of brownfield redevelopment success.
With Solaris and Rishi Tea recently
developing their production, office, and
startup space in the Menomonee Valley,
all of the Valley’s space is almost fully
leased.8 With the positive outcome of
this project, subsequently more land
is being redeveloped into office space
in neighbouring communities through the
Global Water Center and Reed Street Yards.9
4. Commuting
Milwaukee’s attractiveness is evident
by the declining office vacancy rate
reported in 2014, along with an increase
of overall office supply by an expected 1
million square feet within the downtown
core.11 The decision of Northwestern
Mutual to construct its new headquarters
in downtown Milwaukee, along with
construction of the 833 East Michigan
St. office tower is a testament to the
attractiveness of and demand to locate
in the city. Milwaukee’s appeal is likely
to continue, evident by Johnson Controls
possibly building a 50-storey corporate
headquarters
near
Milwaukee’s
lakefront.12 There are many reasons for
Milwaukee’s attractiveness, but the five
attributes that Colliers has identified
have surely contributed to making the
city more competitive in office leasing.
Residents within Milwaukee also have
a short mean travel time to work (22
minutes), especially when compared to
other medium and large-sized cities.10
Chicago residents, for example, have a
mean travel time of 33 minutes. With the
combination of adequate urban transit
and an increase in the demand and
availability to work and live in downtown
Milwaukee, residents should continue to
benefit from short commute times.
5. Amenities
The city of Milwaukee, especially its
downtown communities are appealing, as
the built and natural amenities such as the
downtown lakefront, canal redevelopment,
and museums contribute to the City’s
strength in available amenities.
COLLIERSCANADA.COM/RESEARCH
Case Study - Hamilton, Ontario
Hamilton’s population, proximity to the
large metropolitan region of Toronto, large
number of local colleges and universities,
and manufacturing past are some similar
characteristics shared with Milwaukee.
These similarities are some of the reasons
why Hamilton is a good case study of a
medium-sized, secondary anchor city
along with Milwaukee. Framed within the
five attributes, Hamilton further affirms its
position as an opportune medium sized
anchor city.
businesses. Hamilton has a highly educated
labor force thanks in part to the strength of
the 3 universities and 12 colleges located
within the Hamilton metropolitan area.
Currently about 51 percent of Hamilton
residents hold a postsecondary degree
or above and 22 percent hold a BA or
above.15 Investment into the creation of
the McMaster Innovation Park will help to
further develop the highly skilled labour
force within Hamilton.
1. Cost
Hamilton is well positioned to compete
for businesses due to the relatively low
commercial rental rates for A Class space
and low commercial property taxes per SF.
The commercial property tax per square
feet in Hamilton is approximately 70
cents to a dollar less than the surrounding
municipalities of Oakville, Mississauga,
Burlington, and Brampton.13 Housing and
rental costs are also more affordable in
Hamilton, where the median value of a
home is about $269,000 CAD, compared
to other nearby cities such as Toronto
($439,000 CAD), Mississauga ($438,000
CAD), Oakville ($554,000 CAD), and
Burlington ($401,000 CAD).14 With more
employees requiring to live close to work,
affordability becomes an issue within
expensive municipalities, which is why
Hamilton is appealing to companies looking
for affordable live-work-play locations.
The City of Hamilton has implemented
numerous redevelopment incentives
such as grants for downtown building
improvements, tax increment financing,
assistance with access to capital, and
providing necessary infrastructure to
support business growth. The City has
also established numerous brownfield
redevelopment strategies such as the
Environmental Remediation and Site
Enhancement (ERASE), and LEED
programs, along with public-private
partnerships such as the Going Green
program. Some of these financial
incentives have and will continue to
encourage construction within Hamilton’s
downtown. Over the past four years, the
annual construction value of the building
permits issued within Hamilton has been
more than $1 billion, with construction
activity taking place in the commercial,
residential, and industrial sectors.16
2. Labour
4. Commuting
Hamilton’s labour force quality is
another attribute that makes the region a
competitive location for future office leasing
SPARK | CITIES OF OPPORTUNITY
3. Redevelopment
Hamilton’s average commute time for
residents is quite low (20 minutes) as one
third of Hamilton residents live within five
kilometers of their workplace.17 The City of
Hamilton is actively investing in bike lanes
along numerous roadways, to further
ease local commute times.18 The current
downtown transit infrastructure, combined
with new bike and car sharing programs
will also help accommodate the more
than 2000 completed, under progress,
and planned downtown residential units.19
With the highly publicized increasing
commuter strains associated with locating
within the Greater Toronto metropolitan
area, Hamilton is appealing to businesses
seeking shorter commutes for their
employees. With the completion of the
James North GO Station and connection
to Toronto’s Union station, Hamilton will
also be easily connected with Toronto.
5. Amenities
The city has many of the built and natural
downtown amenities that neighbouring
suburban communities lack. This is an
attractive attribute for businesses that
place a high value on available amenities
within a short distance of their office.
Companies might be further drawn to
Hamilton’s downtown with the proposed
redevelopment of the city’s downtown
waterfront.20
Demand for office space within Hamilton
could increase within the coming years
because of the availability of the five
attributes listed within this report. Early
signals of this growth are presented by the
Conference Board of Canada’s Autumn
2014 Hamilton Outlook. Despite modest
overall growth, the Office sector within
Hamilton saw employment increases
of about 2.6 percent and an increase
of GDP by about 2.2 percent in 2014.21
Forecasting ahead, total employment
and GDP are expected to increase by
1.3 percent and 2.3 percent respectively
within Hamilton’s Office sector from 20152018 (compounded annually).22
Some of the particular industries within
the Office sector that could demand more
space in the future are: professional /
scientific; finance, insurance and real
estate; and creative industries In 2011,
these industries accounted for about 15.3
percent of total employment in Hamilton.23
When examining Hamilton’s downtown
alone, these industries attributed to 36
percent of all downtown employment in
2010.24 In 2014, this share grew slightly,
to around 37 percent.25 During the same
period, employment within professional,
scientific and technical services alone
grew by about 11.3 percent in Hamilton’s
downtown, attributing to about 18 percent
of total employment.26 Employment within
these highlighted industries have and
are expected to continue to grow within
Hamilton, particularly the downtown, as
the city becomes increasingly attractive
for reasons outlined in the five attributes
of this report.
With the continual growth and
meshing of metropolitan areas, there
is an opportunity to locate within
medium-sized anchor cities. With
a large amount of today’s talented
workforce wanting to live, work, and
play within the same neighbourhoods,
medium-sized anchor cities are
competitive in offering this lifestyle
at affordable prices. Colliers has
identified five attributes that combined,
have made and will continue to make
certain anchor cities such as Hamilton
and Milwaukee attractive choices.
COLLIERSCANADA.COM/RESEARCH
REFERENCES
1. Milwaukee Journal Sentinel, Gov. Scott Walker Endorses Milwaukee-Chicago Metroplex Initiative (September 27,2013).
2. Government of Canada, Medium Sized Cities, http://www.cic.gc.ca/english/newcomers/before-city.asp
3. Michael Porter, On Competition October, (2008); Dennis Carlton, The Location and Employment Choices of new Firms (1983).
4. John Crompton and Lisa Love, The Role of Quality of Life in Business (Re) Location Decisions (1999).
5. Colliers International, North American Office Highlights (Q3, 2014).
6. Zillow, Zillow Home Value Index and Median Sale Price of Homes, http://www.zillow.com/ (2014).
7. Metropolitan Milwaukee Association of Commerce, Garnder Denver Moving Global HQ to Milwaukee, http://www.mmac.org/
metro-business-news/gardner-denver-moving-global-hq-to-milwaukee (January 7, 2015).
8. BizTimes Media, Solaris to Move to Menomonee Valley (July 30, 2013).
9. Public Policy Forum, Learning From the Menomonee Valley’s Redevelopment Success (September 22, 2014); Reed Street Yards,
http://www.watertechnologypark.com/
10. United States Census Bureau, State and County QuickFacts.
11. Colliers International, North American Office Highlights (Q4, 2014); Milwaukee Downtown, Investment map.
12. ABC Wisconsin, Alderman: Johnson Controls Could Build 50-Stoy HQ Downtown, http://www.wisn.com/news/johnson-controlswants-50story-corporate-hq-in-downtown-milwaukee/30846642 (January 22, 2015).
13. BMA Management Consulting Inc., Municipal Study (2013).
14. Ibid
15. Statistics Canada, 2011 National Household Survey (2011).
16. The City of Hamilton, Building Division Planning & Economic Development Department Monthly Permit Report (December, 2014).
17. City of Hamilton, Public Works Data (2014).
18. City of Hamilton, Building the Bike Network (2014).
19. Hamilton Economic Development, http://www.investinhamilton.ca/
20. The Hamilton Spectator, Partnership Spurs Remedial Work Along City’s Waterfront (March 20, 2014).
21. T
he Conference Board of Canada, Economic Insights Into 13 Canadian Metropolitan Economies (2014).
22. Ibid
23. Statistics Canada, 2011 National Household Survey (2011).
24. Hamilton Economic Development, 2014 Downtown Urban Growth Centre Employment Survey and Vacancy Update (2014).
25. Ibid
26. Ibid
SPARK | CITIES OF OPPORTUNITY
COLLIERSCANADA.COM/RESEARCH
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SPARK | CITIES OF OPPORTUNITY