MetLife mulls medical office conversion within Water Tower Place

The new owner of Chicago’s Water Tower Place vertical shopping mall is considering plans to convert some of the upper floors into medical space.

MetLife Insurance Co., which took control of the 818,000-square-foot retail base of the Magnificent Mile tower at 845 North Michigan Avenue, is considering plans to repurpose the higher floors of the mall, CoStar News reported.

The potential swap of retail for medical offices at the property follows its former owner Brookfield Property Partners handing it over to MetLife last year in lieu of facing a foreclosure suit The insurer extended the maturity date on Brookfield’s $200 million loan on the property at least twice before it came due again last year.

With the asset in hand, MetLife is now considering transforming the upper levels of the eight-story shopping mall into medical offices, traditional offices or apartments. The redevelopment would seek to better utilize space that has had lighter foot traffic than other parts of the mall and Mag Mile in recent years.

“It’s a unique property type in a lot of ways,” James Cook, JLL’s Americas director of retail research, told the outlet. “If this is successful, it will certainly be a case study for others to follow. It’s a time for reinvention.”

Retail vacancy on North Michigan Avenue has reached an all-time high after the pandemic boosted the popularity of online shopping even more. Water Tower Place wasn’t exempt and in 2021 lost its largest tenant, Macy’s, which occupied more than 323,000 square feet across the eight retail levels and a mezzanine. The mall is still open and tenants include the Chicago Sports Museum, Harry Caray’s Restaurant Group and an American Girl doll store, among other businesses.

Alderman Brian Hopkins, whose 2nd Ward includes the mall as well as the residential condos and Ritz Carlton hotel above, said MetLife hasn’t presented any formal plans yet.

The potential redevelopment into medical space would line up with Chicago-based developer Hearn’s plans for the 100-story former John Hancock Center, which is next door to Water Tower Place. Hearn is marketing a block of office space specifically to medical tenants.

— Victoria Pruitt