LBX Investments purchases Evergreen Plaza shopping center in Lormax Stern, Fortress
The property also serves as a case study illustrating the evolution of the commercial real estate market over the past decades. Opened in 1952, Evergreen Plaza was the country’s first regional mall and became America’s second indoor mall after a renovation in the 1960s.
But it started to decline in the 1980s and was largely vacant by 2013 after losing a bunch of tenants. Lormax Stern demolished the mall in 2015 and remodeled the property with its current, smaller iteration, rental space in the new mall to tenants such as Whole Foods Market, Burlington, TJ Maxx, Planet Fitness and Ulta Beauty.
Evergreen Plaza is 94% occupied, but that does not include an empty 120,000 square foot Carson store at its south end that was not included in the sale to LBX. The Carson’s department store chain closed the store when it went bankrupt in 2018. The company that bought the Chapter 11 chain reopened the store later in the year to close it again in 2020.
Lormax Stern and Fortress retained ownership of the Carson store, according to a spokesperson for JLL. But CBRE is marketing the space for rent or sale, confirmed Joe Parrott, senior vice president of CBRE’s Chicago office.
Representatives for LBX and Lormax Stern did not return the calls. JLL Managing Directors Amy Sands and Clinton Mitchell and JLL Managing Director Michael Nieder hosted the sale at LBX.
LBX, based in Studio City, Calif., Paid $ 67.3 million, or $ 263 per square foot, for Evergreen Plaza, its first acquisition in the Chicago market. He funded the deal with a $ 45.4 million loan from Angel Oak Commercial Lending, according to JLL.
Lormax Stern and Fortress put the property up for sale at what seemed like a bad time last year: just as the pandemic pushed the economy and the commercial real estate market over a cliff. Retail owners suffered when tenants closed their stores and many stopped paying rent, and consumers shopped more online. In an uncertain future, investment activity has practically come to a halt.
While the pandemic remains a threat, buyers have returned to stores this year and the retail real estate market has rebounded. The values of U.S. malls are up 6% from pre-COVID levels and are just below their peak in late 2016, according to a recent report from Green Street Advisors, a California-based research firm.
Grocery-anchored malls, like Evergreen Plaza, also remain popular with investors. Since most consumers still buy their groceries from physical stores, investors see them as less vulnerable to competition online and are willing to pay for properties. In the largest local retail real estate sale since the onset of the pandemic, a Boston investor paid nearly $ 71 million in May 2020 for a Whole Foods store in Lakeview.