California REIT Exiting Mag Mile After Years Of High Hopes And Big Plans
An owner of one of North Michigan Avenue’s leading retail properties has decided to walk away from its huge Magnificent Mile investment. Macerich, a Santa Monica, California-based owner and developer of retail real estate, handed over for $21M its 50% share in The Shops at North Bridge to its partner, the Alaska Permanent Fund, according to Crain’s Chicago Business.
The deal illustrates how troubled this stretch of retail, long one of the nation’s premier shopping destinations, has become after years of seeing its stores battered, first by e-commerce and then the pandemic. The partners had paid $515M for the 670K SF, Nordstrom-anchored shopping complex at 520 North Michigan Ave. when they bought in in 2008, Crain’s reported.
It is also another retreat from the Magnificent Mile for Macerich. The California REIT had become one of the submarket’s most important landlords after also buying 500 North Michigan Ave., an office building next door, for $71M in 2012, and then joining with the Alaska fund in 2014 to buy a parking lot southwest of the mall at 441 North Wabash Ave. for $42M. But it sold the 500 North Wabash building for $87M in 2017 and dropped plans to expand the Shops at North Bridge onto the parcel on Wabash, Crain’s reports.
The true value of The Shops at North Bridge, which also has a $375M mortgage and $42M in equity, still isn't clear, Crain’s added. And how far that value has fallen may not be known until Macerich files an annual report with the Securities and Exchange Commission.