Wauwatosa pair reinvest in community they know well
So a guy walks into a bar and says to the proprietor … That may not have been how real estate developers Jim Rosen and Chris Leffler got together, but considering that Leffler owns Leff’s Lucky Town, a bar at 7208 W. State St. in Wauwatosa, and that Rosen co-owns The Pinnacle Group of Wisconsin, a Wauwatosa-based recruitment and permanent-placement firm, it wouldn’t be out of the realm of possibility.
But it’s no joke what the men have done to improve their community by redeveloping properties.
The two men decided about two-and-a-half years ago to try their hands at commercial real estate and purchased the former Western Publishing building at 6526 River Parkway, Wauwatosa. They both liked the area and, with a Tax Incremental Financing (TIF) district and the expansion of Hart Park nearby, thought it would be a good building to redevelop. They gutted the building and turned it into an incubator for small businesses.
"I don’t want to say it’s common sense stuff, but it’s fairly simple," Leffler said of his dabbling in the commercial real estate market. "You pay this much a month, if you can get this much in rent, you’re doing OK. It’s not brain surgery, although it can be difficult at times."
The duo’s current project is the former Bradley Bug Stop on 106th Street and Blue Mound Road, also in Wauwatosa. The building sat vacant for more than a year, partly because of a divorce settlement. After a failed first offer on the building, the pair, operating as Pinnacle Asset Management, put in a second offer after another prospective buyer’s financing fell through. They bought it for $450,000 and plan to put $250,000 worth of improvements into the site.
A key player in the property’s acquisition was Wauwatosa Economic Development Corporation’s (WEDC) executive director David Geisthardt, according to Leffler and Rosen.
"Dave at the WEDC really pushed it for us to get back in there and set us up with Pat Guzman to really make the deal work because it was tenant-driven and she would be the first tenant, as well as a partner, in the building," Leffler said. "So he really made it happen."
Guzman is the owner of The Innovators in Hair Design currently located in Wauwatosa’s village area. Her salon will occupy one of three retail spaces in the building.
Other prospective tenants are Radio Communications, a Nextel dealer, and a Big Mike’s Super Subs, a submarine sandwich shop based in Madison. A fourth tenant, Evolution Exercise and Spine Center, is in negotiations to occupy the lower level of the building.
The sub shop will be the 28th for Big Mike’s, which also has shops in Milwaukee, Waukesha, West Allis and elsewhere in Wisconsin, Iowa and Minnesota.
It has been Leffler and Rosen’s pattern to take on a partner who is also a tenant in the building they redevelop. The strategy has worked.
As Leffler explained, since neither is independently wealthy, having a guaranteed tenant helps to secure financing for their projects.
Of the eight buildings Pinnacle Asset Management has redeveloped, four have been in Wauwatosa. That makes sense to WEDC’s Geisthardt.
"Local investors know the community, know what the community needs and can support and bear that in mind as they make their decisions," Geisthardt said of Leffler and Rosen. "It’s a nice match, and it’s nice for an economic development organization to have people like that to work with because our objectives, to a certain extent, match their objectives. And they know that working in the community long-term, that’s a good business decision for them."
Leffler and Rosen, both Wauwatosa residents, agree.
"WEDC feels comfortable about approaching us about some properties because we’ve done a couple of them and, hopefully, we’ve improved the community," Rosen said.
"I think we’ve proved that we have the interest of the community in our sights," Leffler added.
"We live here, too, you know?" Rosen said. "We want it to look nice."
April 26, 2002 Small Business Times, Milwaukee
