Flagship Michigan Avenue Store Changes Hands As Mag Mile Tries To Find Footing
Neiman Marcus’ flagship 195K SF Michigan Avenue store has been picked up by Houston-based Silvestri Investments Inc. in a 1031 exchange as the city’s 13-block Magnificent Mile shopping district fights to find its post-pandemic bearings.
The four-story luxury department store chain, which will stay in place, has operated at the 737 North Michigan Ave. location since it was constructed in 1983 and boasts the largest single-tenant continuous frontage along the city’s Magnificent Mile at more than 200 feet.
The district welcomes more than 30 million annual visitors to its upscale retail, restaurants and hotels. But it has struggled to remain relevant amid the rise of e-commerce, the coronavirus and crime rates, as well as the permanent loss of major tenants such as Macy’s, Uniqlo and Gap. Brookfield Properties announced it would turn over the Water Tower Place shopping center to its lender, while Nuveen Real Estate decided to sell its 52K SF space at 919 North Michigan Ave., which houses Louis Vuitton and David Yurman.
Vacancy along the famed shopping street has doubled over the past four years, according to Crain’s Chicago Business, and nearly a quarter of its storefronts are now vacant.
Despite the occupancy slump, JLL Retail Capital Markets Investment Sales Advisory Managing Director Amy Sands said the Neiman Marcus sale marks one of only eight trades on Michigan Avenue within the last decade and “was highly sought after by both domestic and international capital due to the rare flagship offering on one of the world’s most renowned and proven high-street corridors.”
The sale, announced Thursday, was closed and arranged by JLL Capital Markets, which also secured the seven-year acquisition loan. The JLL Retail Capital Markets Investment Sales Advisory team representing the seller was led by Sands and fellow Managing Director Clinton Mitchell, Senior Managing Director Alex Sharrin and Director Michael Nieder. The JLL Capital Markets Debt Advisory team representing the new owner was led by Senior Director Christopher Knight.
Knight said the transaction was a testament to the resiliency of traditional brick-and-mortar retail in the wake of significant changes to consumer habits.
Silvestri is a privately held, family-owned real estate investment firm that oversees lease agreements for over 65 retail centers totaling more than 3.7M SF.