Shopping center

LBX Investments buys Evergreen Plaza Shopping Center from Lormax Stern, Fortress

The property also serves as a case study illustrating how the commercial real estate market has evolved over the past few decades. Opened in 1952, Evergreen Plaza was the nation’s first regional mall and became the second indoor mall in the United States after a renovation in the 1960s.

But it began 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 redeveloped the property with its current, smaller iteration, leasing space in the new mall to tenants including Whole Foods Market, Burlington, TJ Maxx, Planet Fitness and Ulta Beauty.

Evergreen Plaza is 94% occupied, but that doesn’t include an empty 120,000-square-foot Carson store at its south end that wasn’t included in the sale to LBX. The Carson department store chain closed the store when it filed for bankruptcy in 2018. The company that bought the chain out of Chapter 11 reopened the store later that year to close it again in 2020.

Lormax Stern and Fortress retained ownership of the Carson store, according to a JLL spokeswoman. But CBRE markets 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 chief executives Amy Sands and Clinton Mitchell and JLL manager Michael Nieder arranged the sale to 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 was pushing the economy and the commercial real estate market over a cliff. Retail owners have suffered as tenants closed their stores and many stopped paying rent, and consumers shopped more online. In an uncertain future, investment activity has come to a virtual standstill.

Although the pandemic remains a threat, buyers have returned to stores this year and the commercial real estate market has rebounded. Shopping center values ​​in the United States are up 6% from pre-COVID levels and are just below their late-2016 peak, according to a recent report by Green Street Advisors, a California-based research firm.

Malls anchored by grocery stores, 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 online competition and are willing to pay for properties. In the biggest local retail real estate sale since the pandemic hit, a Boston investor paid nearly $71 million in May 2020 for a Whole Foods store in Lakeview.