In late 2009, Brookfield-based HSI Properties LLC began planning The Enclave apartment development in Wauwatosa.
The Great Recession was winding down and HSI was one of the few developers beginning to experiment with multi-family rental properties. Wauwatosa had not had an apartment complex built since The Reserve opened on State Street in 2001.[caption id="attachment_319919" align="alignnone" width="770"] Phase one of the State Street Station apartments will open in June.[/caption]
“No lender was willing to provide financing for an apartment on spec,” said Ryan Schultz, co-founder of HSI Properties. “We put that deal together because we felt confident in the lack of new product that was available in and around the Wauwatosa area.”
The $25 million gamble worked and the 192-unit Enclave, which is located at North 62nd and West State streets, quickly was leased, largely by employees of the nearby Milwaukee Regional Medical Center.
The success prompted HSI to begin scouting for another property in Wauwatosa.
In June, residents will begin moving into phase one of State Street Station, HSI’s four-story mixed-use development in the Wauwatosa Village area, at 7400 W. State St. The project includes 140 market-rate apartments and about 20,000 square feet of retail.
“What the Village has is a unique charm; a built-in amenity that is tough to put a price tag on,” Schultz said. “We are huge believers in Wauwatosa, and even bigger believers in The Village. It’s a suburb, but so close and convenient to downtown that it is a great alternative if you are not into downtown living.”
Other apartment developers also have realized the potential Wauwatosa brings, with its proximity to downtown Milwaukee and its central location that is accessible to many of Milwaukee’s largest employers, including Kohl’s Corp., MillerCoors LLC and Harley-Davidson Inc.–not to mention the Milwaukee Regional Medical Center, which employs 15,000 people, according to VISIT Wauwatosa.
Since the recession ended, the city has made a concerted effort to attract more multi-family developments, like State Street Station, to Wauwatosa. In the past eight years, more than 1,500 new apartment units either have opened or been approved, and city officials would like to see more.
Nearly every project, with the exception of the 24-unit Pasadena Apartments at 803 E. State St. and Mandel Group Inc.’s upcoming project at Milwaukee County Research Park, has received city funds through tax increment financing or another mechanism.
Paulette Enders, Wauwatosa’s director of development, said the money typically pays for the project’s parking or environmental clean-up to allow for more density.
“We run them through a rigorous analysis process and feel comfortable when it comes out that we are not giving them anything more than what they absolutely need,” Enders said.
And while it may seem as though Wauwatosa has exploded with apartments in recent years, there is a need for more, in part to free up some of the single-family housing needs, Enders said.
“We are a major employment center, so not only do individuals working at the Regional Medical Center and Research Park want to live here, but there are also empty nesters who are looking for a change,” Enders said. “That frees up our single-family homes for young people starting families who want to live in Wauwatosa.”
Enders said a recent housing study showed a need for affordable housing, workforce housing, condominiums and accessible housing. The city has had discussions with developers about this need and the developers are researching it, but so far, no plans have been submitted, Enders said.
Meanwhile, market-rate apartment projects are continuing to move forward.
Harmonee Square in The Village; Synergy at The District, at the Mayfair Collection; and Mandel Group’s project at Milwaukee County Research Park all are expected to break ground this year.
This will be Milwaukee-based Mandel’s second apartment project on the west side of Wauwatosa. It is expected to be similar to the company’s 188- unit Echelon Apartments on the nearby Innovation Campus, which took about 14 months to fully lease.
“Our Wauwatosa strategy is centered around the Regional Medical Center and Research Park because it is the largest employment base outside of downtown Milwaukee,” said Phillip Aiello, senior vice president of development for Mandel. “Wauwatosa has various pockets, including The Village, East Tosa, the Mayfair area, and they all have a real vitality which is attractive, and people have really discovered what a great place Wauwatosa is to live.”
The Enclave, 1200 N. 62nd St.; 192 units; HSI Properties LLC*
State Street Station, 7400 W. State St.; 140 units, 20,000 square feet of retail; HSI Properties
Pasadena Apartments, 803-811 E. State St.; 24 units; Cardinal Capital Management Inc.*
The Reef, 1215 N. 62nd St.; 180 units; Wangard Partners Inc.*
The 2100, 2100 N. Mayfair Road; 99 units; John Czarnecki
The Reserve at Mayfair, 11011 W. North Ave.; 236 units; Atlantic Realty Partners LLC and Campbell Capital Group LLC*
Harmonee Square, 1463 Underwood Ave.; 30 units, 7,500 square feet of commercial; Luther Group and Horizon Development
Milwaukee County Research Park apartments; 100 units; Mandel Group Inc.
Echelon Apartments at Innovation Campus, 9810 Echelon Lane; 188 Units; Mandel Group*
Synergy at The District, 11500 W. Burleigh St.; 268 Units; Fiduciary Real Estate Development Inc.
The Elms at Rivers Bend senior apartments, 1535 Rivers Bend; 100 units; Horizon Development Group Inc.
* Denotes completed projects
Address: 8505 100th St., Pleasant Prairie
Lessee: Cree Inc.
Broker: CenterPoint Properties Corp. and CBRE Inc
Closing date: Early May
LED lighting manufacturer Cree Inc. is relocating its distribution facility from Yorkville in Racine County to Pleasant Prairie.
The company signed a seven-year lease at 8505 100th St. and will occupy 147,877 square feet of the 256,240-square-foot warehouse, leaving room for future growth, said Karl Wiedenman of CBRE, who represented Cree in the transaction.
The new location will be used as a distribution center for finished goods, replacing its 80,000-square-foot facility in Yorkville. About 35 people will work at the location.
The building was rehabbed in 2010 and features 239 parking spaces.
“We are excited to add Cree to our existing list of tenants and look forward to a long partnership together for years to come,” said Jim Shields, vice president and regional manager at CenterPoint Properties.