From Brews to J. Crew: Retailers Tap Revamped Milwaukee-Area Warehouses
In real estate, where some see an eyesore, others can sometimes find opportunity.
Such was the case with The Mayfair Collection, a new regional shopping center in Wauwatosa, Wis., located approximately 10 miles west of downtown Milwaukee. Just a few years ago, the 69-acre site was filled with old, obsolete industrial buildings that were mostly unoccupied, but the City of Wauwatosa and our firm, Chicago-based HSA Commercial, shared the vision of transforming the vacant industrial park into a vibrant mixed-use community.
The project initially involved adaptively repurposing 1 million square feet of warehouse space into a contemporary retail destination that has brought national retailers like Nordstrom Rack and Saks Fifth Avenue OFF 5TH to Wisconsin. The development also has helped launch new national brands such as J. Crew Mercantile and Off/Aisle by Kohl’s. The once-empty industrial structures are now completely transformed into lively shops and restaurants that are drawing customers from all over southeast Wisconsin.
Phase I: Find the right mix
What historically made the site attractive for industrial use — its highly accessible location, at the interchange with U.S. Highway 45 and Burleigh Street, less than five miles north of Interstate 94 — also made it ideal for retail, with direct visibility to the 141,000 vehicles that pass by the property each day. But it was the proximity to Mayfair Mall, the region’s dominant shopping center, that drew retailers to the infill project, part of a larger mixed-used development called The District.
The Mayfair Collection’s first phase opened to the public in spring 2014. Designed to complement the full-price offerings at Mayfair Mall, less than a mile southeast of the property, Phase I targeted off-price concepts like Nordstrom Rack that became even more popular with cost-conscious shoppers during the recession.
Project goals also included the creation of cross-shopping opportunities within the center itself, passing up offers from service-oriented businesses in favor of apparel, footwear, cosmetics and accessories retailers that saw value in being part of a critical mass of promotional fashion shops that would attract affluent customers from a broad trade area.
The strategy paid off. Nordstrom Rack was soon joined by Saks Fifth Avenue OFF 5TH, DSW Shoe Warehouse, Ulta Beauty and more. That lineup of best-in-class fashion brands, in turn, helped secure leases from other national retailers, many of which did not previously have a presence in the Milwaukee area.
Some retailers even saw The Mayfair Collection as the ideal place to
debut a new store concept. Last fall, the newly launched J. Crew Mercantile opened its second U.S. location at The Mayfair Collection.
In January of this year, it was announced that Kohl’s had selected the center for one of the first Off/Aisle by Kohl’s locations in the country, filling the last available anchor space in Phase I.
Shoppers who had grown accustomed to driving more than 90 miles to Chicago could now access their favorite stores in a single location much closer to home, with most of the Milwaukee metro area no more than a five- or 10-minute drive away. For the retailers, it was an opportunity to enter a new, less saturated retail market where they could locate next to other category leaders and serve the entire region with one store.
Phase II: Create experiences
With shoppers now driving from all over southeast Wisconsin to enjoy the shops at The Mayfair Collection, it was time to begin the second phase, which sought to increase the frequency and length of visits among the center’s growing customer base.
In late 2014, HSA Commercial broke ground on Phase II, which includes an additional 110,000 square feet of retail, a 140-room Hilton Homewood Suites hotel and a mix of upscale bars and restaurants designed to enhance the experiential nature of the center. Among the offerings are four newly created concepts from Milwaukee-based Bartolotta Restaurants, including a diner, a gastropub, a French bistro and a taqueria.
Rather than isolating the restaurants in a sea of asphalt, we clustered them together in “Restaurant Row,” a strategy that encourages visitors to extend their stay at The Mayfair Collection by providing them with a variety of dining experiences, including numerous different culinary offerings from Milwaukee’s most popular local restaurateurs, in a lively, downtown-like environment.
Phase II’s anchor, a 47,563-square-foot Whole Foods Market, opened in February 2016. The chain’s expansion in Wauwatosa — only its third location in Wisconsin — helped establish the area around The District as one of the region’s thriving commercial and residential corridors. It also added a “daily needs” tenant to The Mayfair Collection’s growing roster of businesses, giving shoppers who might otherwise visit the center on a monthly or weekly basis a reason to go there more frequently.
Phase III: Build a community
The addition of Whole Foods and an eclectic mix of local restaurants, combined with the walkability of The District, laid the groundwork for the development’s third phase slated to break ground this summer.
Along with another 50,000 square feet of full-price fashion retail, Phase III will include 250 luxury residential units, adding a built-in customer base to the growing mixed-use development. The units will be the first of more than 1,000 residences slated for construction at The District over the next five years, pending market demand, via a joint venture between HSA Commercial and Fiduciary Real Estate Development.
As the first residential buildings begin to rise, we are already looking to develop additional sites throughout The District that can cater to the needs of the area’s shoppers, residents, diners and businesses. In January 2015, a separate venture between HSA Commercial and Chicago-based Innovative Capital Advisors acquired the former Schwaab Stamp Factory, a light industrial building across the street from The Mayfair Collection.
Like the warehouses that comprised Phase I of the Mayfair, the Schwaab property will be converted into a 32,000-square-foot multi-tenant retail center, with completion scheduled for late summer 2016. In recent months, we’ve acquired two additional sites near The District — a 114,000-square-foot warehouse and 45,321-square-foot office building, both of which are partially leased — that may also be converted to retail or mixed-use buildings.
Where others once saw an eyesore, opportunities continue to abound as The District grows and attracts new retailers, restaurants and residents. Now that Nordstrom opened its first full-line department store in Wisconsin at nearby Mayfair Mall, customer shopping patterns are evolving as the gravitational pull to Mayfair and The District becomes stronger. And the vision for the future of this project as a vibrant, mixed-use community is well on its way to becoming fully realized.
— By Tim Blum, Executive Vice President, Managing Director of Retail, HSA Commercial Real Estate. This article originally appeared in the May 2016 issue of Heartland Real Estate Business.