A recent article in Crain’s Chicago Business explained, “Why Chicago businesses love Milwaukee now.”
The article named several Chicago firms that have made recent moves to enter the Milwaukee market, including: Carson’s Ribs, which has a restaurant in The Moderne building in downtown Milwaukee; Pizano’s Pizza & Pasta, which will open a downtown Milwaukee restaurant; and Carroll Properties, which plans to build a 37-story apartment tower in downtown Milwaukee.
The Crain’s story did not mention Chicago-based commercial real estate firm HSA Commercial, perhaps because the firm is no stranger to the Milwaukee area. HSA Commercial entered the Milwaukee market in 2003, acquiring the 195,000-square-foot Olson Cos. Inc. plant in Glendale in a sale/leaseback deal, and then in 2004 with the $28 million acquisition of the 717,717-square-foot Brown Deer Business Park.
“We’ve been bullish on this region for quite some time,” said Tim Blum, executive vice president and managing director of the retail division for HSA Commercial. “We’ve always fundamentally liked the business atmosphere in Wisconsin and in metro Milwaukee.”
And now HSA is planning several additional projects that will increase its presence in the region.
Blum is leading HSA Commercial’s ongoing Mayfair Collection development project in Wauwatosa. The Mayfair Collection is a mixed-use project at the former site of Kohl’s and Roundy’s warehouses northeast of U.S. Highway 45 and Burleigh Street in Wauwatosa. The 270,000-square-foot retail space first phase of the project opened in 2014 and included Nordstrom Rack, Saks Fifth Avenue OFF 5th and other stores. Much of the second phase of the project is under construction and will include a Whole Foods store, a HomeGoods store and three restaurants from the Bartolotta Restaurant Group. The project will also add a Homewood Suites by Hilton hotel.
So far the Mayfair Collection project has “exceeded our expectations,” Blum said. “Milwaukee is really underserved for retail compared to Illinois, Cook County in particular.”
HSA Commercial recently announced two major additions to the Mayfair Collection project.
Milwaukee-based Fiduciary Real Estate Development Inc. will build up to 1,050 luxury multi-family residential units over seven to 10 years at The Mayfair Collection. Fiduciary will construct and manage the residential units at the project. The firm plans to break ground this year on the first phase with a total of 250 apartment units and 50,000 square feet of ground level specialty retail space. Phase two will break ground in 2016 with another 250 apartment units and amenities including a fitness center, pool and entertainment rooms. The Fiduciary portion of the Mayfair Collection development will be called The District.
In addition, a joint real estate fund formed by HSA and Innovative Capital Advisors recently purchased the Schwaab Inc. building located at the southwest corner of Burleigh Street and 114th Street, across Burleigh from The Mayfair Collection.
Last year, a separate joint venture between HSA and ICA acquired Plaza 173, a 92,000-square-foot shopping center at 17300 W. Bluemound Road in Brookfield, which the partnership plans to redevelop with a renovation, expansion and the addition of a Fresh Thyme Farmers Market store.
Now HSA and ICA plan to redevelop the Schwaab industrial building into a 32,000-square-foot multi-tenant retail building that will complement the Mayfair Collection project across the street.
“In a lot of ways, we see the Schwaab property as being a gateway to The District given its prominent visibility to travelers on Highway 45 and visitors of The Mayfair Collection,” Blum said. “In order to achieve (Wauwatosa’s) vision for a vibrant, mixed-use corridor, we necessarily have to redevelop this building into a retail flagship that will signify the transformation of this historically industrial area.”
Other divisions of HSA Commercial are also making big investments in the Milwaukee area.
HSA PrimeCare will build a health care facility at the mixed-use Drexel Town Square project in Oak Creek. Froedtert Health will lease part of the 125,000 to 150,000-square-foot facility, said Jerry Franke, president of Wispark LLC, which is the lead developer for Drexel Town Square. The three- to four-story building will also have a fitness center run by a separate operator, which Franke declined to name. And the facility will have a parking structure, he said.
The health care facility will be built at the northwest corner of the Drexel Town Square site. Medical office space was always planned for Drexel Town Square, but the Froedtert facility “dwarfs what I had in mind,” Franke said.
Industrial real estate was HSA’s first investment in the region and that continues with the company’s latest plan for a speculative industrial building in Waukesha. The firm plans to build a 175,000-square-foot multi-tenant industrial building on an 8.4-acre site at 901 Northview Road in Waukesha. The site was formerly occupied by AMF Waukesha Lanes, which closed last year.
No tenants for the building are named in materials submitted by the firm to the city.
This is the latest of several speculative industrial buildings that are planned or under construction in southeastern Wisconsin as the supply of available industrial space in the region continues to dwindle. The region’s industrial space vacancy rate fell to 5.13 percent in the fourth quarter of 2014, down from nearly 10 percent during the Great Recession, according to Xceligent.
“HSA’s internal market study shows significant demand in the area for modern, flexible light industrial and manufacturing space with loading docks,” the company says in plans submitted to the City of Waukesha.
