The owner of Water Tower Place has listed the iconic mall’s upper floors for sale, or lease.
New York-based insurer MetLife, which took control of Water Tower Place in 2022, has tapped commercial real estate firm JLL to market floors four through eight. The mall’s upper levels total 500,000 square feet and were listed last week, according to JLL Managing Director Thomas Kirschbraun.
MetLife engaged JLL about a year ago in an advisory role, Kirschbraun said, as the owner explored the option of consolidating mall space. If such a move were to happen, its retail space would shrink to the mall’s first three floors, according to a property brochure from JLL.
“We’re open to anything that supports the rest of the complex,” Kirschbraun said.
The mall could support office, medical or institutional uses. Kirschbraun said it’s also an ideal space for nonprofits, which could likely fit their entire footprint on one floor.
The upper floors could also be subdivided between users, but it wouldn’t make sense for more than two tenants per floor, Kirschbraun said.
He declined to mention the companies that have shown interest in the space but said the listing has “gotten good interest.”
MetLife declined to comment.
Located at 835 N. Michigan Ave., Water Tower Place was a pioneer for its ability to offer a highly concentrated array of stores for wealthy residents, many of whom lived nearby. But the pandemic and elevated crime along the corridor put a damper on the Magnificent Mile’s success, with vacancy rates still above pre-pandemic levels.
Water Tower Place has suffered its own blows in recent years, including the loss of anchor tenant Macy’s in early 2021. Other retailers — such as the Foodlife food hall, Mity Nice Bar & Grill, Gap, Banana Republic and, more recently, Forever 21 — have also left the mall.
“Malls are having to rework themselves nationally,” Kirschbraun said. “These malls are really large, and it takes a while to reposition them to reflect changing buying patterns. That’s why you’re seeing the amount of retail square footage reducing, much like you’re seeing office space reducing. By its nature, real estate is not a real flexible asset, and it takes a while to come up with the right formula that repurposes portions of these kinds of buildings.”
Other malls across the Chicago area are facing the same reality. Niles is eyeing a redevelopment of its Golf Mill Shopping Center, demolishing the mall and creating a mixed-use town center in its place. In Aurora, portions of the sprawling Fox Valley Mall property have been replaced with new luxury apartments.