Bold Storage

In its second century, Hansen Storage Co. will be a far different company than the one that was founded 100 years ago. For years, the Milwaukee company provided storage of surplus parts for its customers. Some of those parts, such as boat motors, were stockpiled for the busier sales times of the year. Those parts were kept in Hansen warehouses for weeks or months at a time.

As the company celebrates its centennial this year, that has changed.

"In the past, most of our business came from storage of excess inventory that was not ready for use yet," said Peter Schmit, Hansen’s chief financial officer. "Now, we’re more part of the distribution chain of the customer."

"Now. it’s here for a day or two, and then it’s gone," said Bill Hansen, president and principal owner of the company.

Two years ago, the company added a high-tech computer system to keep track of where merchandise is stored. With the system, products that come to the company’s warehouses are barcoded and then scanned into the computer system.

The computer tells workers where to store the item. When the items are to be shipped out, the computer tells the workers where to find them. The system is paperless, and warehouse workers use voice commands to communicate with the computer while picking items for shipment.

The system has improved the efficiency of Hansen’s warehouse operations. Workers spend no time trying to figure out where to put items, where to find them or what order to pick them in. The computer system also helps make sure food products are not stored past their expiration dates.

"We never imagined the benefits we would get from this," Hansen said. "We’ve become more productive, more efficient and we make less errors. It’s a great system."

The computer system means fewer employees are needed. The company has trimmed some positions, but only through attrition, Hansen said.

The company built a 25,000 square-foot building in Cudahy in 2003 and a 40,000 square-foot building in Pewaukee earlier this year. The company now has eight buildings with about 1 million square feet of space.

"We’re in the process of buying more land for development," said Peter Hansen, vice president of the company and Bill Hansen’s son.

The company looks for highly visible sites with good freeway access. The company has shifted its focus to building smaller facilities than it had in the past.

The smaller buildings allow Hansen to accommodate tenants that need a small amount of space for a short period of time. Larger buildings need tenants with commitments for larger amounts of space and longer periods of time.

"The key to our success is our location, our flexibility and our adaptability," Schmit said. "The new buildings just add to our flexibility. We felt at this point in time, we have enough big-box inventory. The niche we needed to fill was for smaller users."

"These are seismic changes," Bill Hansen said. "These are huge changes in the way business is done. It has presented challenges and opportunities for us."

In its early years, the company owned several buildings near downtown Milwaukee and in the Historic Third Ward. Those locations provided access to cargo arriving via boat or rail. In later years, the company followed the region’s population growth by adding suburban locations.

Today, the company is focusing its growth on the western and southern parts of the metropolitan Milwaukee area. The area between Milwaukee and Chicago has significant growth potential in the future, Peter Hansen said. Some Chicago firms are looking for storage options in Wisconsin, where warehousing costs are less.

"Chicago is going to continue to grow (towards Milwaukee)," he said. "We’re getting some nibbles from (Chicago companies)."

As the real estate market changes in the downtown area, so is the use of the company’s oldest properties.

Hansen Storage sold three buildings at 541-601 E. Erie Street along the Milwaukee River in the Third Ward to developer Peter Renner in 2003. Renner is building a two-building condominium complex called Harbor Front at the site.

"We used to have a lot of property in the Third Ward that we’ve sold over the years," Peter Hansen said.

The company sold its former headquarters building at 126 N. Jefferson St. to ComedySportz.

Hansen Storage still has two properties near downtown and is considering their redevelopment potential. The company owns a 15,000 square-foot building at 538 E. Erie St. in the Third Ward, and the property across the street from the Harbor Front development.

"Not a day goes by that we don’t get a call about it," Bill Hansen said of the building, which is for sale.

"We’re not looking to just unload it," Schmit said. "We’re looking to be partners in a development or to have some developer do a development for us."

The company also owns a 70,000 square-foot building on a 120,000 square-foot lot at 412 S. Water St., which is across the river from the Harbor Front development. Hansen Storage executives are waiting for the real estate market in the Fifth Ward to mature further before redeveloping that property. "It’s our intent to hold that," Bill Hansen said.

"Traditional warehousing won’t be as prominent as it has been in the past," Bill Hansen said. "By necessity, we need to do other things. But our roots are still in warehousing. We’re not forgetting warehousing."

The company has about 90 to 100 employees and annual revenues of about $10 million. Business had been stagnant since the Sept. 11, 2001, terrorist attacks, but it appears to be improving this year, company executives say. The company has about 150,000 square feet of space available now and is working on several prospects that could require the construction of more storage facilities.

Last year, the company had over 200,000 square feet of space available.

"One year ago, we had a lot of empty space and no prospects," Bill Hansen said. "Now we could run out of space in the next two to three weeks. That’s a sign of a recovering economy."

Hansen Storage Company

number of warehouse facilities: 8

total storage capacity: about 1 million square feet

Year founded: 1904

Number of employees: 90 to 100

Web page: www.hansenstorage.com

July 9, 2004, Small Business Times, Milwaukee, WI

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