As major anchor retailers at malls continue to shut their doors — Macy’s, J.C. Penney, Sears — those properties are finding a common ground to repurpose the space.
A popular solution favors converting retail space into multifamily, mixed-use developments. And it’s finding big backers with even bigger pockets, as three deals emerged this week alone!
For a recent example, look no further than the Laguna Hills Mall.
Merlone Geier Partners unveiled its updated plan for the 68-acre property during a recent Town Hall. According to the OC Register, two anchor stores – Macy’s and J.C. Penney – going vacant last year freed up more areas for development, company officials said of the expanded plans.
Merlone Geier is also considering doing the same with another failing shopping center in the Golden State: Capitola Mall.
According to Bisnow Chicago, Oak Brook-based Kensington Development Partners and IM Properties just became the latest group to embark on an ambitious plan to remake an outmoded retail center into a mixed-use complex.
Author Brian Rogal writes about the plan’s popularity: “The pair received unanimous approval last week from the Plan Commission of the Village of Morton Grove to transform the retail center formerly known as Prairie View Plaza into Sawmill Station, a 240K SF collection of new shopping, dining and entertainment options, along with a 240-unit multifamily project overlooking the forest preserve on the eastern portion of the property.”
And in a third deal from this week alone, GlobeSt wrote an article on how old retail complexes get a total facelift conversion into multifamily. John Jordan writes that “the 2.4-acre Aspire of Westminster development site is part of the broader 105-acre Downtown Westminster master planned development. The area, which once was a regional shopping mall, encompasses more than 22 designated blocks with 18 acres of parks and public spaces. The first phase of development in Downtown Westminster includes a 1.2-acre public plaza, Alamo Draft House, Origin Hotel, retail and office space and a mix of both market rate and affordable housing. A commuter rail line has been proposed and is currently under consideration.” Origin Investments is in charge of the deal and look how all of their financing tables are 100% funded already.
And it’s not just private financing that is helping to push the space forward on a grand scale.
Commercial Real Estate analytics firm Trepp said even financing on a smaller-scale is booming under Fannie Mae and Freddie Mac (agency funding).
Please see the chart for comparison or click this link, here.