First Wisconsin Corp. said Thursday its flagship bank has agreed to sell its 42-story headquarters building in downtown Milwaukee to Trammell Crow Co. for $195 million.
First Wisconsin National Bank of Milwaukee will sell First Wisconsin Center, 777 E. Wisconsin Ave., a 1.3 million-square-foot skyscraper that is the tallest building in the Badger State.
The company occupies the first 18 floors and the 40th floor of the 14-year-old skyscraper, which is a landmark on the Milwaukee lakefront. Its home office will remain in that space under a lease agreement with Crow.
The deal includes adjacent land on which Crow plans to build a second office tower, condominiums and retail stores.
On Monday, it was disclosed that Crow had paid an undisclosed sum to buy a 50 percent stake held by Jaymont Properties Inc. and become the majority owner of the Hamilton Lakes office-hotel development in Itasca, where Crow`s Midwest region is based.
The Milwaukee acquisition was approved by First Wisconsin National Bank`s board on Thursday and is expected to close by year`s end.
”We believe we can improve profitability by having our capital invested in operating subsidiaries rather than having it invested in real estate,”
said First Wisconsin Chairman Hal C. Kuehl.
”This acquisition underscores our belief in the viability of downtown Milwaukee,” said Jon Hammes, Midwest regional partner of the Dallas-based Trammell Crow.-
Separately, First Wisconsin National Bank approved on Thursday a $96 million increase in its loan-loss reserves because of problem loans to Latin American countries. The bank said the action will boost its loss reseves to $160 million and result in a second-quarter loss to its parent estimated at $55 million, or $2.80 per share.
However, the parent is expected to post a profit for the year because the quarterly loss is likely to be ”more than offset” by gains from the First Wisconsin Center sale and regular operating earnings, the bank said.
The sale will result in a gain of $126 million over the property`s book value and an after-tax gain of $77 million, First Wisconsin said.
First Wisconsin, a $6.6 billion bank holding company and the largest in Wisconsin, has acquired three banking concerns in suburban Chicago: North Shore Bancorp Inc., Northbrook; Du Page Bancshares Inc., Glen Ellyn; and Naper Financial Corp., Naperville.
