Sears store closure a big opportunity for Bayshore

Ever since the $300 million redevelopment that transformed Bayshore Mall in Glendale into Bayshore Town Center in 2006, it was clear that the Sears store there was no longer wanted.

When asked during the project about the anchor tenants at Bayshore Town Center, developer Yaromir Steiner said he was “very happy with” the Boston Store. But his only comment about the Sears store was to point out that Sears had two years left on its lease, plus a pair of five-year options that it could choose to exercise.

Now, eight years later, Sears has announced that it will close its Sears store and Sears Auto Center at Bayshore Town Center, now owned by New York-based Olshan Properties, in December.

“It’s what they’ve been waiting for, for years,” said Ross Koepsel, a partner at Commerical Property Associates Inc. “They have been waiting with bated breath for Sears to get out of their way so they could get something that fit their vision that they want to project to shoppers.”

That vision is of an upscale shopping center in the mixed-use town center format. Opinions differ on how successful Bayshore has been. Some feel it has not lived up to this vision that was hyped when the project was first developed. But others say Bayshore is clearly the premier shopping center of the North Shore.

“They’ve brought some great retailers to the North Shore,” said Peter Glaser, first vice president of CBRE. “It’s a huge improvement over the previous center. It’s been well-received by the community. I think shoppers like the open-air concept.”

But Bayshore still is missing a key element: an upscale department store anchor. Bayshore missed out on Nordstrom, which chose to build its first Wisconsin store at Mayfair Mall in Wauwatosa, and Von Maur, which committed to The Corners project in Brookfield, where work has been stalled.

The closing of the Sears store will provide Olshan with an opportunity to raise the bar at Bayshore and could allow it to finally land an upscale department store.

“Obviously, it’s a great opportunity for them to bring some new life to that end of the center,” Glaser said.

Olshan will “start with the cream of the crop (upscale department store chains) and work their way down,” Koepsel said.

But will Olshan be able to land an upscale department store at the Bayshore Sears site?

“I certainly think they are going to try,” Koepsel said.

“I do believe they could,” said Cory Sovine, vice president of the Siegel-Gallagher retail group.

Upscale department store chains could be attracted to Bayshore’s site near I-43, the densely populated and affluent North Shore and its proximity to the affluence of Mequon and the rest of Ozaukee County.

Nordstrom probably will not open another store so close to Mayfair Mall, but Von Maur might add a store at Bayshore if its store at The Corners is built and is successful, Sovine said.

But Koepsel expects Olshan to seek a tenant that will be new to the metro Milwaukee market.

“I think they’ll look for someone that would be unique to their property,” he said.

“(Bayshore is) not going to get an ultra-luxury store like Bloomingdale’s or Nieman Marcus,” Sovine said. “(Bayshore) might get a Sak’s.”

The closest Sak’s Fifth Avenue store is on Michigan Avenue in Chicago. The store’s off-price version, Sak’s Fifth Avenue OFF 5TH, has several stores in the Chicago area and earlier this year opened a location at the Mayfair Collection development in Wauwatosa.

Nordstrom also opened one of its off-price stores, Nordstrom Rack, earlier this year at Mayfair Collection.

Olshan could choose to replace the Sears store at Bayshore with several smaller mid-box stores, which could appeal to tenants like Nordstrom Rack and Sak’s OFF 5TH, Sovine said.

Brian Riordan, principal of The Boerke Company, predicts that the Sears store at Bayshore will be replaced with smaller tenants, essentially an extension of the existing town center.

“There is a huge pent up demand of tenants that want to be there,” Riordan said. “From the developer’s perspective, it’s probably much more valuable to have several smaller tenants than one large one.”

Retailers like Bayshore because it is one of the few major retail sites in the affluent North Shore, it is easy to access from I-43, and its restaurants and other amenities help attract shoppers, Riordan said.

“I think it just has a great draw,” he said. “It’s the largest retail development on that side of town. It’s a great market for retailers. They all do well.”

Development of the Sears store site could include residences above retail space. The apartments at Bayshore Town Center have been a big success, according to Robert Monnat, chief operating officer of Mandel Group Inc., which managed the construction of the apartments for the project.

If Olshan is unable to attract an upscale department store to replace Sears, it could opt for a middle-tier department store such as Macy’s, which has locations at Mayfair Mall and Southridge Mall, but has no presence on the north side of the metro area.

Siegel-Gallagher principal John Kuhn predicts that a two-story Target store will replace the Sears store at Bayshore. The North Shore lacks a Target store. The closest Target stores to Bayshore are in West Milwaukee and on Brown Deer Road on the far northwest side of Milwaukee. Many North Shore Target shoppers trek up to Grafton to shop at the store there.

“I think there’s tremendous demand (for a Target store in the North Shore),” Sovine said. “But if they end up putting a Target in there, that would be conceding defeat from (the upscale vision of) what Bayshore Town Center was going to be.”

Olshan Properties declined to provide details about its plans for the Sears site at Bayshore.

“Bayshore Town Center is one of Milwaukee’s prime retail destinations,” Olshan Properties senior vice president of asset management and development Ryan Guheen said in a statement. “The north end of the project (where the Sears store is) has great potential. We have been evaluating various scenarios and look forward to further enhancing the project when the time is right.”

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