Brookfield hands over keys to Mag Mile mall

Moves comes about a year after the mall lost Macy’s, its largest tenant.

Chicago /
Apr.April 06, 2022 11:43 AM

Brookfield’s Bruce Flatt with Water Tower Place (Brookfield Asset Management Inc, Google Maps)

Brookfield Property Partners is handing over the keys to Water Tower Place, a Magnificent Mile mall, about a year after it lost Macy’s, its largest tenant.

Brookfield plans to relinquish the mall to its lender, MetLife Investment Management, a unit of New York insurer MetLife, according to Crain’s. Water Tower Place was the first indoor mall in Chicago when it opened in 1975 and is part of a development that included condominiums, office space and the Ritz-Carlton Chicago.

The decision underscores how challenging it’s been for landlords and retail tenants on the Chicago shopping strip to recover even as the pandemic wanes. A quarter of retail space on the Mag Mile is vacant, according to Crain’s.

Giving up the property means that Brookfield doesn’t think it’s worth spending the money required to restore the mall to pre-pandemic success. The mall has also lost so much equity that the firm’s investment is gone — it’s now worth less than the $300 million in debt owed on it.

“Water Tower Place will no longer be part of Brookfield’s portfolio,” the company said in a statement. “After many discussions to carefully assess and identify all available options to move forward, we’ve determined that it is best to focus Brookfield’s resources on other opportunities within our portfolio.”

A Brookfield spokeswoman declined to comment to Crain’s beyond the statement.

The nine-story, 818,000-square-foot mall at 845 N. Michigan Ave. lost other tenants besides Macy’s during the pandemic, including Banana Republic, Aritzia and Riley Rose. Initially, Brookfield planned a substantial makeover of the mall after Macy’s left, but the renovation never materialized.

MetLife may consider revitalizing the mall itself or selling it off. In a statement to Crain’s, MetLife declined to comment on the specifics of the transaction.

Retailers vacating the Mag Mile include Forever 21, which left 42,000 square feet along North Michigan Avenue before the pandemic. In some cases, landlords are struggling to replace them and building owners have tried to create smaller spaces for retailers. The North Michigan Avenue retail vacancy rate rose to 26 percent in 2021 from 5.3 percent in 2017, according to Cushman & Wakefield.

[Crain’s] — Miranda Davis






    Related Articles

    arrow_forward_ios
    Celine's Séverine Merle's with  939 North Rush Street (Google Maps, ESSEC Alumni)
    French boutique Celine coming to Chicago’s “ultra-expensive” shopping district
    French boutique Celine coming to Chicago’s “ultra-expensive” shopping district
    Bears George McCaskey with Soldier Field
    Minor league baseball complex aired for new Chicago Bears stadium
    Minor league baseball complex aired for new Chicago Bears stadium
    Fritz Kaegi (iStock)
    Chicago Assessor Kaegi wins primary, fending off trade union challenge
    Chicago Assessor Kaegi wins primary, fending off trade union challenge
    The John Buck Company's chairman and CEO John A. Buck II in front of a rendering of the planned two-tower office building project at 655 West Madison Street (The John Buck Company, Juan Gabriel Moreno Architects, iStock)
    John Buck shifts to two-tower plan for West Loop project
    John Buck shifts to two-tower plan for West Loop project
    Belgravia Group's chairman Alan D. Lev and 1319 East Golf Road in Schaumburg (Belgravia Group, Google Maps, iStock)
    Belgravia cashes out of Chicago PGA store with $19M pandemic flip
    Belgravia cashes out of Chicago PGA store with $19M pandemic flip
    311 W Walton Street (LoopNet)
    River North office building triples in value since 2014
    River North office building triples in value since 2014
    Citadel's Ken Griffin (Citadel, iStock)
    Miami nabs another big name as Citadel’s Griffin shifts HQ
    Miami nabs another big name as Citadel’s Griffin shifts HQ
    A photo illustration of 840 North Michigan Avenue in Chicago's Magnificent Mile (Acadia Realty Trust, iStock)
    Acadia Realty at risk of another Mag Mile loss as H&M probes market
    Acadia Realty at risk of another Mag Mile loss as H&M probes market
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...