CRE N Illinois

Hansen Realty: Adapting the use of industrial buildings

Rick-6
Rick Hansen

With the Re-Positioning/Value-Added Commercial Real Estate Conference right around the corner, it made sense to profile Hansen Realty’s brother team of John and Rick Hansen. The conference will take place at their building, the Bradley Business Center, on June 26.

With the Re-Positioning/Value-Added Commercial Real Estate Conference right around the corner, it made sense to profile Hansen Realty’s brother team of John and Rick Hansen. The conference will take place at their building, the Bradley Business Center, on June 26.

Excitement is an understatement of what I felt when touring the 350,000-square-foot property (only 150,000 square feet remains to be leased). I was completely over the moon! With the fabulous showroom, Hansen Realty’s vision is clear: The company plans to showcase how it can turn a dormant space into something spectacular.

“Our goal is to give someone something to visualize,” said John Hansen, a principal of Hansen Realty. “When you go back into our larger area it’s hard to visualize because there’s nothing there. Yet when you enter the showroom model at the business center, you can visualize and see the possibilities.”

With more than 30 years of experience, Hansen Realty is considered an expert in real estate, and rightfully so, as the company’s mission has always been to assist its clients in maximizing the value of their real estate. It’s a mission they’ve upheld since the beginning in 1970.

“Our father started a brokerage company in Lincoln Park,” John said. “Really, my brother Rick started the commercial brokerage from the ground up. So my brother and I have been working on this together since 1988.” The Bradley Business Center (located at 2500 W. Bradley Place) consists of Bradley 1, which has three buildings, and Bradley 2, which is the building the brothers are currently leasing.

“When we bought the property next door it was empty,” John said. “When we brought this property it was mostly empty, so we’re basically filling it as we go on. I think we’ll be filled here in about three years.”

The property’s immense size is impressive. Including Bradley 1; the center boasts 500,000 square feet of space on 22 acres. With amenities that include (but aren’t limited to) a shower/changing room, bicycle room and parking, outstanding storage usage, built-to-suit spaces and high-tech offices, the property sets itself apart from others.

“I don’t think there’s a model for what we’re doing in the city,” John said. “The real demand for this area comes from the fact that we probably have one of the largest assemblies of single-story building and land, with a good amount of landscaping and parking, located adjacent to the Chicago River Walk on the North side of Chicago.”

So what has Hansen Realty done to position its building to attract new tenants? John says it goes back to the history of their involvement in the area.

“We had the building next door, which we bought with Centrum Partners, in December of 2006. Probably through the worst of the real estate cycle in 2008 when the markets crashed, we were leasing it up. We are now 100 percent leased. I would say the mix is two-thirds corporate users and one-third recreational users. It’s worked out well.”

“The corporate users are Warner Bros.,” John added.

“That was a $5 million build-out, roughly 40,000 square feet. It’s a little dark in there,” he said, chuckling. “But they like it that way for the programming that they do.”

John says that deal showed that there was a market for the area. After the building leased up, the next building became available, which Hansen purchased recently. Since the company bought it, it has leased up another 60,000 square feet.

“We had an existing tenant of 80,000 square feet,” he said. “So we have a remaining space of about 167,000 to lease, which 50 is multi-story office, and 117 is single-story building that we’ll lease out to office and recreational users.”

As far as prospective tenants go, John says that the company probably has two square feet of prospects for every one square foot of space they have.

“We have letters of intent out on 40,000 square feet right now, and prospects for at least a couple hundred thousand square feet.”

With tenants already that include the Tribune, IK Gymnastics, Goldfish Swim School, Lil’ Kickers, All Style, and Warner Bros. (If you’re a huge Mortal Kombat fan like I am, you’d want to live in that place!), there’s space for almost anything you can think of. Although most of the tenants are geared towards grammar-school children and high-school teenagers, a fitness center will likely be put in the building for the adults.

“Understand that this is a mixed-used project,” John said. “So here you have your recreational users, some office users and in the front you have the multi- story office building. Those types of users would want an amenity like a fitness center.”

The Hansen brothers said diversifying the tenant mix was planned.

“If you go onto LoopNet or CoStar, and search the market we are in if you’re looking for a single-story space with parking, the only thing you’re going to find are properties on Goose Island that are 100 percent leased,” John said. “Then you’ll find things all the way out in the O’ Hare market, and between here and there, there is nothing else.”

John added, “So we know our property will pop up in their database searches. Also, other corridors like Clybourn have three times the rent of what we have here. They’re in the thirties on net rent, we are ten net on our single-story space.”

The only thing the Hansen brothers say they are not at the Bradley Center is industrial.

“We take a property that was industrial and convert it into office, recreational, and other commercial uses,” John said. “We have R&D prospects, and even though we have RCN as a tenant next door, I would say half of their space is office at this point and time. They have 130 employees that work out of that location.”

It’s estimated that with all off the tenants that have been leased at the Bradley Center, there are about 600 jobs now within that area. That’s something the Hansen brothers are happy about. Especially Rick who said he was glad to be contributing to a growing community.

Turning nothing into something takes a lot of time, planning, and energy. Yet what makes the Hansen brothers feel the best? It’s knowing that they have leased up their buildings. They have five or six other properties that are one hundred percent leased. The Bradley Business Center is their only active project.

Most of the properties that they have owned and developed over the years are along the Kennedy between Downtown and O’Hare. They’re located at Sheffield and Diversey, Wilson and Kennedy, Knox and Kennedy, and at Wood and Webster, where they have recreational users.

Working in a field for over 25 years is nothing short of amazing. It appears as though with everything Hansen Realty has seen, they have gone and conquered. The Hansen brothers are excited to let the world know what they have going on at the Bradley Business Center. With the conference approaching they look forward to seeing people, and discussing the re-use possibilities for the property, while showcasing a vision that is sure to ignite inspiration for anyone who cannot see the possibilities.