As reported in Biztimes.com By Corrinne Hess
An affiliate of Milwaukee-based Phoenix Investors purchased the JCPenney Logistics Warehouse and Furniture Outlet Center in Wauwatosa for $31.25 million. The 2 million-square-foot building is located on 77 acres at 11800 W Burleigh St., just west of I-41. The property is assessed by Milwaukee County for $22.8 million.
J.C. Penney Co. announced on Feb. 13 it would close the distribution center and call center beginning this summer and lay off a total of 670 employees. Phoenix Investment plans to renovate the buildings internally and externally and re-lease them.
“These buildings are in exceptional condition given their age,” said David Marks, Phoenix’s president, and CEO. “Once complete, they will look and function like a newly constructed industrial facility. Beyond the tangible brick and mortar of this facility, Phoenix was drawn to the demographics of the workforce that has sustained this facility throughout its history.”
“While our formal marketing has not yet begun, we have already had an overwhelming interest in the JCPenney property from virtually every regional brokerage firm on behalf of their clients,” said Kurt Jensen, senior vice president of Phoenix. “The demand exceeds the available space. We are in active discussions with over a dozen quality companies for portions of the complex.”
In 2017, JCPenney closed about 140 stores. The Wauwatosa distribution center portion will close on July 1 and the customer care center will close on Sept. 1. The Plano, Texas-based company will sell the building and transfer its operations to facilities in Lenexa, Kansas, and Columbus, Ohio, according to an email from JCPenney.
“Virtually everyone in the metro Milwaukee knows someone that either worked at the facility or had a relative that worked there,” said Phoenix’s Chairman & Founder, Frank P. Crivello. “As the largest owner of industrial warehouse and manufacturing space in Wisconsin, we are uniquely qualified to re-position these buildings in a manner that will result in a number of new high-quality companies occupying portions of the complex.”
Phoenix’s affiliate companies hold interests in approximately 20 million square feet of industrial, retail, office, and single-tenant net-leased properties across 23 states.
About Phoenix Investors
In 1991, Frank P. Crivello created two private trusts, Irrevocable Children’s Trust and Irrevocable Children’s Trust No.2 (the “Trusts”), for the benefit of his children, Joseph and Anthony Crivello. Later that year, through their majority interest in the First Berkshire Business Trust, the Trusts completed Wall Street’s first single-tenant retail property-backed securitized financing. That transaction, secured by 43 Kmart retail locations and warehouse stores, became a precursor for CMBS structures commonly used over the last twenty-five years.
In 1994, David Marks became a trustee of the Trusts, and Phoenix Investors (“Phoenix”) was created as the management company of the Trusts’ investments. Throughout the 1990s, Phoenix focused on single-tenant arbitrage opportunities available across the country. To this end, Phoenix exploited various market inefficiencies that existed including information inefficiencies, differences in credit perceptions of unrated regional and national tenants, and innovative Wall Street financings, the combination of which produced above-market returns.
From 2002 to the beginning of the Great Recession in 2007, our management team concluded that prevailing real estate opportunities and trends did not meet its disciplined risk/reward analysis. Phoenix suspended new acquisitions of commercial property and instead focused on improving its existing portfolio. Since the Great Recession, Phoenix has aggressively used its experience to source, identify, and harvest unprecedented commercial real estate opportunities. Currently, our focus is on maximizing underappreciated asset classes including Class B and C industrial properties, portfolio and REIT dispositions, and creatively working with corporations, banks, and other institutions on underperforming asset dispositions.
Looking forward, Phoenix will continue applying its disciplined investment strategy to commercial real estate opportunities while implementing new technologies and adding resources.
To successfully identify and execute opportunities in a dynamic and changing marketplace, Phoenix has built a talented team of professionals across all levels of its business, providing them with cutting-edge technology tools, and superior benefits including a highly acclaimed wellness program. The Trust beneficiaries, Joseph and Anthony Crivello, both of whom grew up around Phoenix, are part of its Advisory Board and reflect the next generation of leadership for Phoenix. The Phoenix team has been critical to our achievements to date and will lead Phoenix to new heights in future decades.