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Weekly Brief – March 1, 2021
/in Weekly Brief /by Dave NykanenThis week’s discussion is about change. Although it is hopelessly cliche, the only constant in the real estate marketplace is change.
In past weeks, I have discussed the change that will be caused by the decline of bricks and mortar retail (especially malls), the rise of cannabis-related uses, the decline of video stores, and the long-term impact of electric and autonomous vehicles.
This week brings several stories about further changes. In Farmington Hills, we see a brand new hotel development quickly pivoting to senior housing. Also in Farmington Hills, we see vacant industrial space being redeveloped into multifamily housing.
At the national level, we see L Brands shifting its Bath & Body Works store mix away from mall locations. L Brands is also continuing to see its store count for Victoria’s Secret, another mall retailer, decline. And near Kalamazoo, we have another mall that is about to fail. All of these mall locations will be the subject of reuse.
Change is constant in real estate.
Farmington Hills Hotel Pivots Due To The Pandemic
/1 Comment/in SE Michigan /by Tracy WillisThe Farmington Hills’ Holiday Inn and Suites, NW Detroit, is shifting its focus. Due to the pandemic, hospitality and restaurants have taken a beating. Southfield-based Group 10 Management is converting the hotel (which was opened in 2018) into senior independent living quarters. 76 apartment units would be created from 133 hotel rooms in the current hotel layout. The company has kept two other properties in the same location open as hotels as there is a need for extended-stay facilities.
Crossroads Mall in Portage $77M Underwater, Deed-In-Lieu Possible
/2 Comments/in Outstate /by Dave NykanenThe Crossroads Mall in Portage, Michigan (near Kalamazoo) has recently been valued at $22.6M. Unfortunately, the mall has $100M in mortgage debt. The owner is currently in discussions with its lender about a deed-in-lieu. Although stories about the decline of the regional mall are all too common, the decline of Crossroads has been stunning, as it was valued at $152M as recently as 2013.
In addition to the square footage covered by the mortgage, the mall is home to a (vacant) Sears store, as well as JC Penney and Macy’s anchors.
As mentioned in a recent Weekly Brief, the mall is dead.