Chicago-based HSA Commercial Real Estate is considering plans to build a 100,000-square-foot speculative industrial building at its Park 94 development in Mt. Pleasant.
“We’re exploring the opportunity,” said Craig Phillips, executive vice president of development for HSA.
Park 94 currently consists of two buildings with a total of 448,610 square feet of industrial space on an 83-acre site southwest of Highway 20 and Highway V.
Last year HSA sold the larger of the two buildings, with 323,610 square feet of space, to Naples, Italy-based Seda International Group SpA. Seda is one of the world’s largest manufacturers of packaging for food industries.
The other building at Park 94, with 125,000 square feet of space, has been leased to two tenants. Maysteel LLC occupies half of the building and moved its operations there from Menomonee Falls. The other half of the building was recently leased by All States Trucking, Phillips said.
The success of Park 94 has led to HSA considering plans for the next phase of the development.
“We’re out of space,” Phillips said.
The new building would be built to the south of the Maysteel/All States Trucking building.
Speculative commercial real estate development has been almost non-existent since the beginning of the Great Recession. However, real estate professionals say there is a lack of available industrial space in Racine County and demand there is picking up.
“We have several potential users that are looking for about 60,000, 80,000 or 100,000 square feet,” Phillips said. “There are many more users looking in the Mt. Pleasant area than there were last year.”
“(The project) makes all kinds of sense,” said Jeff Horn, an industrial real estate broker for Brookfield-based Grubb & Ellis|Apex Commercial. “There’s just no space down there.”
“Racine’s hot,” said Paul McBride, an industrial real estate broker for RFP Commercial. “There is just not a lot of (available) product in the Racine market. I think there’s demand in that area.”
Statistics support that assessment of the Racine County industrial market. Racine County’s industrial space vacancy rate fell from 6.7 percent at the end of 2009 to 4.7 percent at the end of 2010, according to The Dickman Company Inc. That is lower than the overall southeastern Wisconsin industrial space vacancy rate of 8.6 percent. Racine County’s industrial real estate market had positive net absorption of 790,960 square feet of space in 2010, according to The Dickman Company.
Industrial firms that are interested in Mt. Pleasant and Racine County typically are Milwaukee area companies that do business in Chicago and want to avoid higher taxes in Milwaukee County, Phillips said.
“The Milwaukee-Chicago (corridor commercial real estate) market is fairly healthy,” Horn said. “Milwaukee is going to end up connecting to Chicago through that path.”
Kenneth Braden of Milwaukee-based Cassidy Turley Barry is the local broker for HSA’s Park 94 project.
