Retail v Wisconsin

HSA sets new norm with massive retail project in Wisconsin

HSA Commercial Real Estate's plans to convert supermarket warehouses in Wisconsin into 250,000 square feet of retail space received a boost April 11. That's when the Wauwatosa, Wis., plan commission voted unanimously to approve HSA's plans for a large-scale retail project for that city's Burleigh Triangle area.

HSA Commercial Real Estate's plans to convert supermarket warehouses in Wisconsin into 250,000 square feet of retail space received a boost April 11. That's when the Wauwatosa, Wis., plan commission voted unanimously to approve HSA's plans for a large-scale retail project for that city's Burleigh Triangle area.

HSA's plans now have to receive permission from the Wauwatosa city council. But after a plan commission gives its OK, this second round of approval is usually guaranteed.

Tim Blum, executive vice president with HSA, said that the optimistic plan calls for the company to break ground on the project in the fall. Tenants would then move into the new retail center, which HSA has named The Mayfair Collection, in the spring of 2013.

Blum, in a recent phone interview, pointed to this project as an example of how commercial real estate developers are adjusting to a new market. HSA is saving costs by re-using existing warehouse buildings rather than tearing down existing properties and starting over with new construction.

"This is the kind of project guys like us have to do to survive," Blum said. "No one is doing new construction today. They can't afford it. No one can pay the rents that you'd have to charge. By re-using buildings, we are providing the same shells to tenants at far cheaper construction costs."

Blum estimated that construction costs on The Mayfair Collection will run about a third less than they would have if HSA would have demolished everything on site and started building fresh.

Project plans

In the first phase of construction, HSA will demolish part of a warehouse complex that was formerly occupied by Roundy's, the supermarket chain. HSA will then convert the remaining space into about 250,000 square feet of retail space.

The project's second phase will feature stores and restaurants in new buildings that total 120,000 square feet of space.

The project includes walkways connecting its phases and an internal street ssytem. Parking will be located at the rear of buildings.

Future phases could include new office and residential space.

Blum wouldn't confirm the reatailers with which HSA is negotiating for the project's first phase. But other reports indicate that HSA is in negotiations with Nordstrom Rack, Dick's Sporting Goods and The Container Store.

For commercial developers, HSA's project is a good example of what Blum calls the industry's "new normal."

"This is the new norm. This is what developers like us have to do to attract tenants," Blum said. "It's what we have to do to attract business. Let's be honest, there is no new construction going on."