Commercial Real Estate and Apartments and Residential Real Estate and Property Management and Retail Development and Development/Redevelopment and Real Estate & Retail

Developer closing in on Ironworks anchor tenant

April 9, 2013
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The developer of the $30 million Ironworks at Keystone project hopes to have an upscale restaurant signed as an anchor for the five-story mixed-used building within a few months.

Wisconsin-based Hendricks Commercial Properties plans 36,000 square feet of ground-level retail space and 120 high-end apartments on the site of the former Woodfield Centre shopping center on the southwest corner of 86th Street and Keystone Avenue.

REW Ironworks rendering 15colThe Ironworks project breaks ground this week and is expected to finish in summer 2014. (Rendering courtesy Hendricks Commercial Properties)

Hendricks is set to break ground on the project Wednesday and hopes to have a commitment from a “very nice” restaurant by the end of June, said Larry Evinger, the developer’s senior vice president of asset management.

Real estate brokers not involved with the project say they’ve heard likely anchors include a steakhouse or breakfast establishment.

The restaurant would occupy 10,000 square feet of space with 10 to 12 tenants possibly splitting the remaining 26,000 square feet.

“The balance, we’ve got some flexibility on,” Evinger said. “We’ve got some interest from large users and soft-goods users that could skew that one way or the other.”

The site is highly attractive to retailers looking to capture higher-income shoppers who frequent the nearby Fashion Mall at Keystone and Rivers Edge shopping centers.

“It’s an extremely strong location,” said Bill French, a broker at Cassidy Turley. “There seems to be no end of tenants that want to be in that Keystone Crossing area.”

Ironworks will feature an urban-style design, with the building abutting the intersection and 350 surface parking for shoppers and diners behind. A 150-space underground garage will provide parking for apartment residents.

 

Hendricks in early 2012 agreed to acquire the property from Jacksonville, Fla.-based Everbank, which took control of the vacant strip center in 2008 after the now-defunct Premier Properties USA Inc. defaulted on a loan. The land had been the centerpiece of Premier’s $750 million Venu proposal.

Everbank found no takers when it listed the parcel $6.75 million in 2008, so it opted to wait. The local office of real estate brokerage Lee & Associates began marketing the property for the bank in 2011 with an asking price of $5.5 million.

The Ironworks project should be finished in summer 2014 and could be fully leased by then, judging from demand in the area, said Jordan Klink, an investment specialist with the local office of Marcus & Millichap.

“There’s been a lot of projects over there that have seen good leasing activity, so that shows that there’s pent up demand in that area,” he said.

But not everyone is pleased with its arrival. The Nora-Northside Community Council has opposed the development from the start, arguing it’s too dense for the area.

“Five stories right up against the street is not compatible with the vision that we have held, and the city in the past has maintained, for that corridor,” Council President Ruth Hayes said. “The whole development is too intense for the infrastructure that’s there.”

The council also opposes a major project under discussion for the northwest corner of 86th and Keystone. Local developer Keystone Construction Corp. owns the 12.6-acre site and has floated plans for a $40 million apartment and retail project

Keystone Contruction has said it hopes to build about 240 high-end apartments along with a small retail building and outlots along 86th Street. A failed plan from another developer had envisioned a Whole Foods Market and townhomes for the mostly wooded site.

Keystone bought the property in July 2011 for about $3 million from the Federal Deposit Insurance Corp., which wound up owning it after Columbus, Ind.-based Irwin Union Bank failed in 2009.

The developer is considering various ideas for the site but has yet to determine specifics, mindful of the Nora council’s concerns, said Paul Okeson, Keystone’s vice president of business development.

“We want it to be consistent with what the area will bear,” he said. The [Ironworks] development across the street is a good one, and I think it will add tremendous value to the area.”

Hendricks has brought on locally based Buckingham Cos. to manage the Ironworks property and the Sitehawk Real Estate brokerage to handle leasing.
 
 

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