Water Tower Place To Undergo $170M Redevelopment, Repositioning
The iconic Water Tower Place shopping center on Chicago's Magnificent Mile is slated for a dramatic reinvention that will consolidate its retail space and diversify its tenant mix.
Landlord MetLife Investment Management will invest over $170M in the property's redevelopment. The first three floors of the renovated space will house retail tenants, while floors four through eight will be repositioned for complementary uses, including office and medical office space.
Matt Sharples, regional managing director at MetLife, said in a press release that though the project is still in the design phase, the investment will fund significant improvements to the property.
"This redevelopment is designed to ensure that we continue to offer a must-visit destination for future generations," Sharples said in a statement.
The redevelopment will offer small- to medium-size retail footprints and aim to capitalize on the scarcity of available retail space on the Mag Mile, according to a press release from Water Tower Place. Offerings will be flexible, accommodating both small retailers and anchor spaces at street level.
"This historic investment is about filling a supply gap on Michigan Avenue while also preserving the legacy of America’s first and most heralded vertical shopping center," said David Stone, founder and principal at Stone Real Estate and lead retail leasing agent for Water Tower Place, in the release. "We will deliver new opportunities for retailers, offering flexible suite sizes."
Water Tower Place opened in 1975 as the city's first indoor mall. MetLife took control of the property in 2022 via a deed-in-lieu-of-foreclosure.
Design and planning are currently underway, and construction is expected to start in 2027, with "substantial completion" anticipated in 2028, according to an informational page on the project. The construction will happen in phases to allow existing tenants to remain open.
The redevelopment team includes retail architectural studio Neumann/Smith and general contractor Pepper Construction.
This announcement comes as conditions have been slowly improving on the Mag Mile following a pandemic-induced low point, as retail vacancy hit 33% in 2023.
The strip has seen notable tenants ink leases and open storefronts in the early going of 2026.
The National Confectionery Sales Association completed a 60K SF lease for the Candy Hall of Fame at 830 N. Michigan Ave. earlier this month, a shot in the arm for the shopping corridor as it was the largest lease signed on the avenue in more than a decade. Uniqlo, which left its Mag Mile storefront during the pandemic, returned to a new, smaller space in March.
In the second quarter of 2025, leasing volume started to gain steam, according to Kirsch Agency. Vacancy fell to 28.5% by the end of 2025, and the agency projects the vacancy rate to settle around 23.5% by the end of 2026.
