Verizon is disconnecting from the Magnificent Mile.
The telecommunications giant joined a growing list of big names that have left the iconic, but dwindling, section of the Windy City with its announcement that it is leaving its 27,00-square-foot operation at 840 North Michigan Avenue. This adds to the problems Acadia Realty Trust is facing, Crain’s reported.
Apparel retailer H&M is ditching its remaining 60,000 square feet in the same building, and is downsizing by 50 percent to 679 North Michigan Avenue. Arcadia suffered a $50.8 million non-cash impairment charge on the property last year — a huge red flag for investors, creditors and lenders that indicates a massive drop in value.
Arcadia, led by CEO Kenneth F. Bernstein, could salvage its investment by selling the property in order for a developer to raze and rebuild on the site, the outlet suggested. This is a path many landlords in the neighborhood have or are considering pursuing.
Brookfield Property Partners, which owned the 117,000-square-foot retail building at 830 N. Michigan Avenue, put the property up for sale last summer after all of its tenants left, including Uniqlo.
There have been a few tangible signs, however, that the Mag Mile could be on the upswing. Houston-based Silvestri Investments just paid $94 million for the four-story building at 737 North Michigan Avenue, and Blatteis & Schnur bought the fully leased, 5,860-square-foot space at 909 North Michigan Avenue for $27.3 million around the same time.
And Arcadia has holdings at 664 and 717 North Michigan, where Alo Yoga plans to open a new store. Bernstein seems confident in the retail strip, regardless of its struggles since the pandemic.
“Demand thankfully is starting to come back on North Michigan Avenue, and I don’t want to pretend that it’s easy or mission accomplished,” he told the outlet. “But we’re having retailers now show up that a year ago we wouldn’t have thought of.”
—Quinn Donoghue
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