As an enthusiastic Uptown resident, young commercial real estate entrepreneur Brian Hara knows its turf inside and out. And that familiarity helped his six-year-old firm land a rare opportunity to create a new retail venue on bustling Lake Street.
It's not every day that a corner commercial property only blocks from Uptown's epicenter becomes available, and indeed, the former Car-X Muffler & Brake shop at 1001 W. Lake St. was barely on the market before Hara's Blackhawk Investment Group snapped it up in January for $900,000.
Now, the 3,200-square-foot former garage is about to get a "gut rehab" and a possible expansion en route to becoming the neighborhood's newest Class A retail building.
Hara, 28, and Chicago-based partner Drew Breneman, 29, are the firm's co-managing partners. Hara says they were Johnny-on-the-spot with the Car-X buy because of their philosophy of staying "hyperlocal" in their real estate investments — that is, amassing a deep knowledge of specific locales and then patiently awaiting the opportunities that arise within them.
"This is a neighborhood we really understand, and we feel pretty bullish about it," Hara said. "Our strategy is to get really educated on a certain area."
His education has included living in Uptown for the past five years and also owning several residential properties there. And in the present case, previous commercial real estate work in Uptown played a key role.
The Blackhawk partners first laid the groundwork for the latest venture shortly after completing their very first deal in 2009: Purchasing a then-new retail building at 1015 W. Lake, right next door to the muffler shop. The 1015 W. Lake building is now occupied by Darque Tan and Verizon Wireless.
"At that time, [Breneman] approached the former Car-X owner and said, 'Hey, if you're ever interested in selling, give us call,' " Hara said. "That planted the seed. We were the first ones that got the call when he ultimately decided to sell."
The Car-X property is not the biggest in Blackhawk's Twin Cities retail portfolio. Its Vadnais Square in Vadnais Heights and Promenade Place in Eagan are larger. But Hara said the firm's specialty is "sticking to our knitting" in venues it knows well.
That's also what Blackhawk is doing in Chicago, where Breneman is leading a charge to acquire and renovate small apartment properties all located near each other in that city's Wicker Park, Bucktown and Lincoln Park neighborhoods.
The two partners met while working for Plymouth-based multifamily developer Dominium, which at the time was performing a $30 million renovation project right across Lake Street from the Car-X shop at the Buzza Lofts.
After forming their own firm, the pair initially concentrated on buying existing "investment grade" buildings such as 1015 W. Lake, but Hara says his background in design and construction makes him more attuned to "value-added" real estate plays such as the current project.
He has teamed with Minneapolis-based RoehrSchmitt Architecture on plans to transform the muffler shop into a Class A retailing venue, including gutting the interior, constructing a new facade and adding tower elements to the exterior.
Depending on potential tenant interest, Hara said Blackhawk could seek city permission to expand the building as well.
Mid-America Real Estate is handling the listing for the project and Hara asserted there's been a "robust" response so far, even before the renovation work has been bid out.
"Most of it is coming from retailers and food service-type users," he said. "I would like to explore the idea of expanding to make this building about the same size as the one next door."
Rehab work is expected to begin within four to six weeks, Hara said.
Don Jacobson is a freelance writer in St. Paul. He can be contacted at firstname.lastname@example.org.