The companies that bought the Wells Building in downtown Milwaukee plan a significant investment to make it a national-caliber data center, and potentially an office hub for tech companies.
The historic office at 324 E. Wisconsin Ave. sold for $7.25 million this fall to an affiliate of fifteenfortyseven Critical Systems Realty LLC, a national data center operator and developer. Investment management firm Harrison Street partnered on the purchase.
Todd Raymond, CEO of 1547, said the company scours the country for properties like the Wells Building. More than 30 data networks all link up in the Wells Building, making it a sort of interchange for fiber optic information transmission. That means any companies that use data centers in the building have a quicker route to move their videos, photos, medical records, 3-dimensional renderings, or digital meeting content from the save point to the end users’ “eyeballs.”
Raymond and 1547’s strategy is to upgrade the Wells Building’s infrastructure to be able to host more data centers in its vacant spaces.
“Those content providers want to be in the location where they can reach the largest number of eyeballs with the least amount of cost, and in a location like Wells with over 30 networks they can achieve that like nowhere else in the upper Midwest,” Raymond said. “There’s typically a building like Wells in most major cities, and it’s just that there’s only probably two dozen that have as many networks as Wells has.”
The Wells Building’s connectivity dates to the railroad era. The 1901 building was built for Western Union and became a centerpoint where telegraph lines that followed the railroads linked up, Raymond said. Those wire rights-of-way became telephone networks and eventually fiber optic cables. Instead of having operators receiving telegraph messages from one system and resending them through another, it’s now a central hub for different data providers to move information from their systems onto others.
The Wells Building already hosted some data center operations under its previous owner, Madison-based Ascendant Holdings LLC. Ascendant owned Wells since 2011, when it acquired the 15-story building from Zilber Property Group. Under Ascendant’s ownership, office spaces were leased out to companies including Kohler Co. and Everstream, which is expanding its fiber optic data networks in the Milwaukee area.
It will take a long-term, substantial investment for 1547 to increase the Wells Building’s ability to host more data servers, as they have big power and cooling demands. In phases, the Wells Building ‘s power and cooling systems will be bulked up, its security upgraded and, in an aesthetic touch, its exterior spruced up, Raymond said.
The extent of the work and the timing will be determined after 1547 can study the building in more detail, he said. Heavy work likely won’t start until summer 2021, Raymond said.
The Wells Building ‘s vacant floors and spaces will be outfitted for data servers, and 1547 will rent that space to data center operators, Raymond said. The Wells Building also will remain a multi-tenant building with more traditional offices available for lease, he said. Going forward, because of the technology in the building, it could become more attractive to tech startups, he said.
“My experience in other markets is we’ve created an environment that is very conducive for an ecosystem of tech companies, tech-enabling companies, in buildings like this,” he said.