Shopping center

Owner decides to leave struggling Westlake mall

The loss of the Stein Mart store when the department store chain closed in 2020 and the inability to recruit replacement tenants prompted the owner of a Westlake neighborhood center to turn over the property to the lender.

“It killed me to give it back,” Brian Burton, the manager of former owner Westlake Home Improvements Associates, said in a phone interview.

Burton in 1974 led the development, with a dozen partners, of the neighborhood mall at 25001-25099 Center Ridge Road.

“We were short about $15,000 a month,” Burton said. “We wore it for two years until we ran out of money.”

The new owner of the square is Rialto Capital Management, a special manager that manages distressed properties for lenders, especially those issued on the CMBS market. On Sept. 26, Rialto acquired ownership of the property through a subsidiary called RSS CFCRE2-6-C4-OH WHIA LLC, according to Cuyahoga County Land Records. Rialto, which manages the property through its Miami office, also serves as asset manager.

CoStar, the online real estate data provider, reports that the loan, originally for $4 million, still has $3.5 million to pay. CoStar said the loan was 90 days past due.

A public giveaway at the shed is that another brokerage, Cushman & Wakefield Cresco of Independence, has started marketing empty spaces with a sign that was just posted on the site. He hopes to lease the 51,000 square foot space Stein Mart has occupied since 1998 and another 9,000 square feet. Seven other tenants, three of which are rented as offices, occupy the rest of the centre.

Ryan Fisher, senior vice president at Cushman & Wakefield Cresco, declined to comment on the property.

The place has two big issues that make it problematic. One is that the Stein Mart space is so large that there are few mainstream retail prospects, and the smaller space is too deep for most small retailers. The other is that its location on Center Ridge Road is far from major retail outlets.

David Bruening, director of Stamford Properties of Beachwood, which handled the rental of the property in the past, said: “It’s between Clague and Columbia roads, both of which have I-90 access. But it’s also between Fairview Park and North Olmsted shopping districts.

“Then you developed Crocker Park in Westlake,” Bruening said of the large, mixed-use center. “You just couldn’t compete.”

Tori Nook, director of real estate brokerage and investment firm Anchor Cleveland, called it “a super secondary place. Unless someone like the Cleveland Clinic (emerges) with a special need, you’re in deep trouble. “.

She said that if the places available were smaller, it would be possible to fill them. The retail market as a whole is healthy in terms of occupancy.

“We have domestic tenants who cannot enter a location on Crocker Road,” Nook said. “Most of the (mall) owners I work with have better occupancy than ever before. If it was a small store, it would be full.”

An example of this is nearby. The smaller King James Plaza, across from Stein Mart Plaza, is fully stocked with tenants.

The place changing hands by deed in lieu came as a surprise to Michelle Boczek, Westlake’s director of economic development.

“I tried to interest other retailers instead (Stein Mart), but failed to get their attention,” Boczek said.

The space that Stein Mart occupied for over 20 years was big for a reason.

Burton said it originally housed a former furniture store. Burton said the city has blocked off some prospects for the space, such as a daycare center and a shooting range.

Jim Bedell, director of planning and economic development for Westlake, said the suburbs, for the most part, don’t allow child care in malls for safety reasons.

Bedell said he was unaware of the offer for a shooting range. However, he said adding such use would require changing the city’s law prohibiting individuals from discharging a firearm within its borders.

There is no indication whether Rialto could sell the center, especially since it sits on a 10-acre site in a suburb where vacant land is dwindling.

“They’ll sell it. The question is when,” said Alec Pacella, president of brokerage firm NAI Pleasant Valley in Independence. Like other experts, he considers it a good property due to the affluent neighborhoods nearby.

“The question will be what happens next,” he said. “I don’t see it being backfilled by other commercial tenants.”

Rialto did not return two calls about the property or respond to an email on its corporate website until 1 p.m. Thursday, October 6.