Attention, buyers: This fading mall could transform into a resi complex

JLL is marketing the Highland Park shopping center that has been approved for residential development

The mall at 1610 Deerfield Road in Highland Park is now zoned for residential development (Google Maps, iStock)
The mall at 1610 Deerfield Road in Highland Park is now zoned for residential development (Google Maps, iStock)

The coronavirus crisis has turbocharged the retail apocalypse among brick-and-mortar businesses, but one mall owner in Highland Park saw the writing on the wall long before that and angled for a change.

Last November, Balboa Retail Partners received approval from the village to rezone the fading 104,000-square-foot shopping center to allow for a residential complex. Now, the Los Angeles-based mall owner has hired JLL to market the property at 1610 Deerfield Road, whose 50,000-square-foot Toys R Us store closed two years ago after the retailer went bankrupt, Crain’s reported. The mall is now 64 percent vacant.

A new developer could demolish the existing buildings on the 7.6-acre property and construct up to 381 residential units, according to Crain’s, citing JLL’s marketing material.

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Balboa was formed in 2011 and has acquired over 3 million square feet of retail assets across 18 states, according to its website.

The move comes at a time when retail continues to get pummeled. A new report from Coresight Research showed as many as 25,000 retail stores may close this year because of the pandemic, with a majority closing in shopping malls. That number would dwarf the prior record of 9,800 retail closures set in 2019, according to the report. Already, 15 national retailers have elected not to pay May’s rent, according to a separate report from Datex Property Solutions. And Macerich, which owns 47 shopping malls across the U.S., said it collected about 25 percent of rent owed by tenants in April, and a similar number as of mid-May.

Simon Property Group, the nation’s largest mall owner, sued The Gap earlier this month for $66 million in unpaid rent across its properties and this week exited a $3.6 billion deal to acquire mall operator Taubman.

Locally, Simon also skipped its $1.3 million May payment on the $257 million mortgage for Gurnee Mills mall; and a KKR venture with Pacific Retail Capital Partners missed its $333,000 payment on a $107 million mortgage for Yorktown Center mall. [Crain’s] — Alexi Friedman 

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