A Different Way Of Development
Continental Properties Company has set up development teams so it can act as multiple companies under one umbrella.
Randall Shearin

Continental Properties Company, Inc. (CPCI) is a company that takes a different approach to development. With more than 25 properties under development at any given time in the company’s retail division and more than 11 million square feet of retail space developed since 1991, Continental has created a unique way to handle development.

Shopping Center Business recently traveled to the Menomonee Falls, Wisconsin, headquarters of Continental Properties to meet with the leaders and the team behind the company. While at Continental, Shopping Center Business met with Jim Schloemer, chairman and CEO of the company; Gerry Severson, vice chairman and president of the company’s retail group; Dan Minahan, president and COO of the company; Tom Keenan, executive vice president and CFO; and the entire retail team.

An 88,408-square-foot Kohl’s location in Chandler, Arizona.

Continental Properties has been a leader in real estate development for nearly 30 years. While a sophomore in college, Schloemer and two of his high school friends started Continental Properties. In the beginning, they did brokerage work in any category from residential to commercial. That was until the three friends developed an 8,000-square-foot office building in West Bend, Wisconsin. After Schloemer finished graduate school, he changed the company’s focus to commercial real estate. The company began buying small strip centers with private investors in the early 1980s, about the same time the company relocated from West Bend to the Milwaukee area. The company created its first ground-up center in 1989, a Fleming’s Foods and Kmart-anchored center in Madison, Wisconsin.

Fountain Square, CPCI’s 178,106-square-foot center in Brookfield, Wisconsin.

The 1980s and 1990s proved to be a time of great growth and change for Continental. Two of the three founders sold out of the business, leaving Schloemer as the sole founding partner. As Kmart provided Continental with the opportunity to develop outside Wisconsin, Severson joined the company in 1992 as executive vice president. Continental development projects expanded to the upper Midwest and South Central United States, which is also when the company established its headquarters in Menomonee Falls. Dan Minahan joined as president in 1996. Steve Wagner, an original founder, rejoined the company in 1988 and serves as senior vice president of the retail group and a team dealmaker.

A 30,853-square-foot Wild Oats location in Scottsdale, Arizona.

The changes and growth through the years have helped shape the way the company is set up, which is different than most development companies. Instead of having departments dedicated to specific disciplines, the company is divided into teams that handle all aspects of a project including due diligence, construction, and finance. Each team has a dealmaker, finance person, development coordinator and director, paralegal, attorney, property management professional, construction manager, cad technician, and administrative assistant. This approach allows the company to divide and conquer — handle multiple projects while seeking out other opportunities for development. Each team handles between six and 16 projects at one time. The different disciplines from each team can unite to create a department when issues arise. For instance, all the legal staff can be called in to consult if a problem on a development project should arise. Another advantage to this approach is that the same people are always working together. The same dealmaker is always working with the same construction project manager. Every team member also knows what the team’s priorities are instead of just his or her priorities. In addition to having responsibility to the team, each team member also holds responsibilities within their departments.

A 44,840-square-foot Publix in Mt. Pleasant, South Carolina, near Charleston.

Internally, the team dealmakers are known as “quarterbacks” because they are charged with the team’s success.

“Each team has a deal originator at the top of the team,” says Severson. “We use the football reference because the leader of the team is the quarterback. He’s responsible for calling the plays, deal origination, managing a development director, a development coordinator, attorney, construction disciplines, and administration.”

Most of the company’s dealmakers have worked in development for other companies. Some worked for retailers, while others worked for developers. Each likes the freedom that Continental’s team approach gives them. It allows them to operate a company-within-a-company, making decisions and holding ultimate responsibility. “The team approach works very well because each team is its own company within Continental,” says Walt Lautner, a team dealmaker. “Not only do we have the resources within our team on a daily basis, but we can pull from the rest of Continental with each employee’s diverse experiences and history. What really enables us to act quickly is having every component of the development process within the team.”

Larry Kellar and Tim Marco.

The company’s retail teams operate somewhat geographically and have their own specialties. Russ Posorske and Mike Kumelski head up a team based in the company’s Phoenix office.  Their team concentrates on developments in Northern California, Nevada, New Mexico and Arizona. The team concentrates on both center development and the development of single-tenant net lease properties. Larry Kellar is a team leader based in Cincinnati. A former Kroger and Kmart executive, he joined Continental in 2002 to develop properties in the Mid-Atlantic. Bill Zanoni, who recently joined the team after working for Target and other developers, works out of the Jacksonville, Florida office. Mark Nelson, Chris Moore, Walt Lautner, and Steve Wagner work out of the home office. Nelson heads up a team that concentrates on Iowa, Illinois, Minnesota and Wisconsin. Moore heads a team that handles properties from Maine to the Carolinas and across the Midwest. Steve Wagner concentrates on properties in Wisconsin and Colorado. After 18 years of experience working for Kohl’s and Kmart, Lautner joined Continental in 2005. Lautner works on projects in a variety of states including Ohio, Michigan, Virginia, and Montana. Rounding out the retail teams are leasing associates Tom Vaughn and Tim Marco who concentrate on leasing small shop space and outlot sales in the Midwest, Colorado, and in the Southeast. To help guide the teams, Severson divides his time between the Milwaukee, Jacksonville, and the Phoenix offices.

“What has really struck me as different about Continental are the resources, talented people, open communication, and cooperation that exists here,” says Posorske, who has been with Continental about a year. “In a lot of companies, I think you would have a lot of competition with this much development going on. It is a very positive culture and that translates into every business deal.”

Left to right: Jim Schloemer, Gerry Severson, Mike Kumelski, Steve Wagner and Tom Vaughn.

Continental’s typical retail developments average 120,000 square feet, anchored by a big box retailer or grocery store. The company has developed centers as small as 50,000 square feet and as large as 400,000 square feet. The company’s volume has averaged about 1 million square feet of new retail development per year for the last few years. 

The company has a sizeable research department. Part of its role is to look for markets for retail development opportunities. Once identified, the development teams confirm the opportunity and begin looking for sites within the market. After a site has been selected and a retailer identified as an anchor, Continental then works on a development plan for the center. “We meet with our tenants several times per year and keep them aware of new opportunities throughout the year,” says Posorske. “Because we have a wealth of experience in our company, someone at Continental has been to the market that they may identify.”

The executives at Continental believe that there is more to their products than just the brick and mortar of a shopping center. They feel that the quality of the site that they bring to the retailers is as equally important to the quality of the center that will be built on it. “We’re mostly relationship-driven,” says Severson. “We cherish our relationships with retailers we’ve worked with over the years. We are also research driven. Taking our relationships and combining them with population trends and changes in marketplaces — that’s how we create opportunities.”

Left to right: Larry Kellar, Tim Marco, Chris Moore and Mark Nelson.

In addition to Continental’s strong relationships and quality development, the on-time delivery of a finished project holds a high value in the company and Continental’s clients. “There is a confidence and trust in our ability to deliver a finished product amongst the retailers that we deal with that has been earned over a long period of time,” says Kellar. “That means we deliver on time and to the specifications that the retailers require. At the end of the day, it has to be a good location and a good site that we stand behind.”

These characteristics can be found not only in the commercial projects Continental produces, but in the multifamily and hospitality developments as well. The company’s multifamily division operates from Jacksonville, Florida, and opened in 2001. Continental entered hotel development two years ago. The company is experiencing growth in all of its product types with projects underway in more than 15 states. While the company has not combined any of its three sectors together, it does see the potential to do so in the future to create mixed-use developments. “As a developer who already has a strong track record in retail, multifamily and hotel properties, we have a unique competitive advantage,” says Severson. “We don’t have to find joint venture partners in the hotel or apartment business. We’re very bullish about the prospects for growth in all three lines of our business and the synergy among the three sectors.”

Mark Nelson and Russ Posorske.

Continental has also taken advantage of the opportunity to sell centers when the opportunity is right. Over the past three years, the opportunity has been right a number of times with cap rates for neighborhood and community shopping centers at record lows.

Continental has more than 3.1 million square feet of retail in some phase of development. The company is in development or pre-development with retail centers in Minnesota, Colorado, Georgia, Ohio, Iowa, California, Texas, Illinois, Virginia, Florida, North Carolina, South Carolina, Arizona and New Mexico.

With nearly 30 successful years of positioning itself as a leading developer with the right tools for development, who knows what the future will bring for Continental.