Condo Developer Confident Second Time's the Charm

Is John Wahlen defying conventional wisdom?

“Yes, that’s what they tell me,” Wahlen says without any hesitation.

He exudes complete confidence and excitement about his planned condominium development on Highway 164 and Seven Stones in Sussex.

On Tuesday, the t for his firm, Cornerstone Development of Southeastern Wisconsin, to move ahead with his project, Glen at Seven Stones condominiums.

The new neighborhood will feature 56 ranch-style homes, along with a clubhouse, pool, deck and an open air amphitheatre. The units will range in cost from about $250,000 to $350,000 and will range in size from 1,400 square feet to 1,800 square feet.

“There are very few brand new condominiums and very few (developers) that do what we do, and yet there are still people in need,” Wahlen said.

“There are people who, for whatever reason in their life, whether they’re single again or something has happened to cause them to need to go ranch-style, whether they’re moving back here to be close to family and they need a place.

"Buying new is terrific, because you get a warranty and you get to choose the finishes you want. In this case, if you’re downsizing, there’s a clubhouse. When you need to upsize, you can have the private party room, and it comes with a pool.”

But hold on. What about the housing market?

This condo project ran into trouble and stalled in 2008, as Wahlen’s detractors have pointed out.  But he maintains that it wasn’t the housing market, but rather the banking market, that stalled the project.

“I had loan commitments from two banks and they backed out,” Wahlen said. “We had to pull back and take some time to structure the deal. We got more creative with the deal. There’s a young bank that’s going to do it."

Wahlen said village leaders see a need for the project, as evidenced by their willingness to for the project. The village would recoup those infrastructure costs from Wahlen over 10 years through a special tax assessment. 

Still, the real estate market has been extremely challenging, especially where it concerns condominiums.

“The condo market has taken the biggest hit, other than vacant land,” said Roy Scholtka, president of Coldwell Banker HomeSale Realty. “There’s probably pent up demand out there, but it’s just a question of whether there’s enough consumer confidence for people to make the changes.

"Plus, there’s just a lot of product out there that has to get absorbed. Anything that we’re selling yet has to be a deal. The buyers are looking for deals."

Scholtka said he doesn't know if the condo market is set yet to turn around, but he expects it will, in time. 

"I’m waiting for the residential single-family market to move first," Scholtka said. "But the condo market will come back because it’s a lifestyle choice.”

Lifestyle choice is the reason Wahlen is so confident about the project.

“A lot of people like to buy new because it’s a great way to meet friends and feel part of a neighborhood,” Wahlen said. “We sell lifestyle."

The condo appeal, Wahlen said, is that the units are low maintenance.

"Maybe (the buyer) can’t handle the yard or the exterior maintenance. That’s who we’re appealing to, and those buyers are still out there," Wahlen said.

"Are they out there as crazy as it was when I built Pilgrim Glen in Menomonee Falls? No. I’m not selling four or five a month. But two a month? Yes.”

Wahlen also pointed out that a similar project of his in Brookfield, the Glen of Brookfield (just east of Moorland Road and to the east of the Brookfield Suites Hotel), has been doing well.

“I’ve already sold 35 of the 46 homes there, at $250,000 to $350,000,” Wahlen said.

Then there’s location, location, location. Seven Stones is just south of Lisbon Road at Highway164. A drive through an environmental corridor will lead to the condos on the top of the hill.

"It’s a great location because you’re a mile and half from a new Costco, Wal-Mart, Pick ‘n Save, Kohl’s and Shopko,” said Wahlen.

“Another reason we’re successful is because the floor plans are just different than what people see," Wahlen said. "These are side-by-sides, but four to a building. Now you can tuck the garages so they’re not so visible to the street."

In addition to curb appeal, the floor plans vary and present well, according to Wahlen, and some include features such as a sun room.

In assessing the condo market and prospects for Wahlen's project to succeed, Scholtka said there are several things that have to fall perfectly into place.

“He has to have the best product, the best price, the best financing and the best location,” Scholtka said. “He can’t miss on any of those.”

For his part, Wahlen’s convinced that the Glen at Seven Stones will become a reality this time around. Although no constrution date is set and Wahlen does need to pre-sell some of the units, he's not worried, he's exuberant. 

“It’s been really fun to prove those skeptics to be inaccurate in Brookfield,” Wahlen said. “It’s just such a delight to watch the neighborhood come together. I can’t tell you how gratifying that is.”