Seeing long-term strength in Racine County’s industrial real estate market, a national development firm is planning to begin site work this year to convert a former country club into a $440 million business park that, at full buildout, would be the largest development the Village of Caledonia has seen.
New York City-based Ashley Capital has plans for 10 industrial buildings, to be constructed over several phases, totaling approximately 3.8 million square feet at the former South Hills Country Club site just east of Interstate 94 and south of Golf Road.
The business park will be called the South Hills Commerce Center with buildings ranging in size from 218,400 square feet to 554,000 square feet, plans show. Possible tenants could include e-commerce, logistics, event space exhibit manufacturing and other light manufacturing, Ashley Capital told the village.
Late last year, an affiliate of Ashley Capital purchased the 223-acre development site for $24.5 million, according to state property records. The seller was Hintz Real Estate Development Co., which began marketing the property for sale in 2017 with talks over its redevelopment on and off since then.
The South Hills Commerce Center is expected to increase the property’s assessed value by $300 million, which would be the largest development ever in the Village of Caledonia. Ashley Capital told the village the business park could attract 2,000 full-time jobs, according to village documents.
Under a development agreement the village approved in November, Ashley Capital will collect 85% of the tax increment the project generates, subject to conditions including “an obligation to achieve scheduled guaranteed minimum assessed values on the property,” according to village documents.
Ashley Capital, which has several offices nationally, has been investing for many years in Racine County, where it has already developed more than 2.7 million square feet of industrial space across two business parks. Enterprise Business Park in Sturtevant has about 2 million square feet of leasable space, much of which was developed speculatively, and has about 1 million square feet of space available, according to Ashley Capital listings. Yorkville Business Center, also in Sturtevant with 714,000 square feet of space, does not have any space listed for lease.
The company previously told the village that vertical construction on the first phase of South Hills Commerce Center could begin in 2026, but the company did not respond to multiple requests for comment on an updated timeline. The first phase is slated to include two buildings.
Racine County has experienced some of the industrial development momentum in the I-94 corridor south of metro Milwaukee, though most of the construction and leasing volume has been in Kenosha County to the south, as it remains a logistically stronger location closer to Chicago. However, as Microsoft builds its $3.3 billion data center complex in Mount Pleasant, some industrial real estate brokers think Racine County could start seeing its own momentum of industrial development.
“Racine County has gained a good reputation for the willingness to do the really large development with Foxconn originally, and now everything that’s ensued from that,” said Jim Barry, president of Milwaukee commercial real estate firm The Barry Company. “I think that there are companies that are looking at that and saying, ‘If those companies are going to locate there, then I should locate there, too.’”
The Barry Co. helped assemble the land for Amazon’s 1 million-square-foot distribution facility in Kenosha, which opened in 2015.
“When we worked on that transaction, there was a lot less there, the freeway (corridor) was just starting to be redeveloped,” Barry said. “I think that once Amazon came in with its distribution center, Uline and a lot of the other companies that are there now took notice of Kenosha as a good place to locate. I think you have somewhat of that same phenomenon going on with the larger developments in Racine County, and I’d expect to see that continue.”
According to the most recent report from the Commercial Association of Realtors Wisconsin, Racine County’s industrial real estate market has a vacancy rate of 7.9%, which is higher than most of the region amid historically low vacancy rates, brokers said, but is not an abnormal rate.
In recent quarters, Kenosha County’s vacancy rate has increased to more than 12.5%, according to CARW reports, as large speculative buildings have come online and leasing velocity for that type of space has slowed in the area.
“There is a lot of vacant speculative space in Kenosha County that’s going to take awhile to absorb,” Barry said. “Relatively speaking, Racine does not have that much, so I’d foresee that with the right phasing, there’s going to be continued positive trends with this new business park.”
