Orion retail site will take a condo approach
Oakland Business ReviewAugust 30, 2007By Heather Rousseau
What Todd Rosenzweig wanted to do with his project at Village Square in Orion Township was to build a quality, revenue-producing retail development. But his company, Bloomfield Hills-based Square Lake Group, had to do something to get the shopping center to stand out from the rest of the pack of retail properties.
So Square Lake Group is offering the option to purchase the space as a retail condominium.
"We had to do something to get the iron hot," said Rosenzweig, who is director of acquisitions at the company his father founded.
He and broker Harry Barash, associate at CB Richard Ellis' Southfield office, concluded that allowing tenants to become owners would set them apart from similar retail opportunities.
Square Lake Group broke ground in August on its 10-acre piece of the total development site at Baldwin and Maybee.
On the corner of Baldwin and Maybee is a Walgreen's pharmacy, and adjacent to Square Lake's development is a 25,760-square-foot retail building being developed by another property owner. Square Lake Group is constructing 24,446 square feet of retail space and 48 condominium homes. The first phase of Square Lake's condos and retail are under construction.
"I think it's the market - we have to make ourselves stand out better," Rosenzweig said. He added that the retail space certainly can be leased instead of purchased.
No leases have yet been signed, the property having gone on the market fewer than two weeks ago, but a handful of prospective tenants have contacted Barash.
Square Lake Group has owned the property for 10 years, but getting the final plan to develop it took a good deal of time, Rosenzweig said.
"That process started seven years ago," he said. "But the vision for it changed over time. We originally wanted it because it was the only major commercial site in that area of Orion."
Originally the site, which is zoned for local commercial use, was planned for a Kroger store. The supermarket was instead built on another site nearby.
"Then we had a plan for an assisted living and child care and retail project, but the township didn't like that at all," Rosenzweig said.
At that time, the condominium market was hot, and there was very little available on Baldwin Road.
"We thought that what was missing was the mid-priced condo," Rosenzweig said.
The township required Square Lake Group and two neighboring property owners and developers to work together to come up with a cohesive plan for the site, and a year ago the final site plan for Village Square, Gingellville was approved.
Then, the challenge was the economy.
"We had to ask ourselves, 'How do we create some absorption?' We knew that we've got to sell the units," Barash said.
The price range for the residential condominium units is $179,000-$219,000. Square Lake Group is building two of the buildings now - between eight and 16 units.
The first phase - 8.956 square feet of retail - also is under construction now. Per-square-foot lease rates range from $14-22, triple net. Sales prices for the retail condominiums are $180-$230 per square foot, plus association fees, which Barash said will be $4-$5 per square foot.
Completion of the first phase is expected in autumn 2008.
The company has about 100,000 square feet of industrial property, 300,000 square feet of office and 2,000 units of residential - mobile home and apartments - in five states.