The owner of Water Tower Place, long a desirable retail destination on Chicago's Magnificent Mile, is walking away from the troubled mall.
In a statement Wednesday, Brookfield Properties spokesperson Lindsay Kahn said Water Tower Place “will no longer be part of Brookfield’s portfolio.”
“After many discussions to carefully assess and identify all available options to move forward, we’ve determined that it is best to focus Brookfield’s resources on other opportunities within our portfolio,” Kahn said.
Ownership will be transferred to lender MetLife Investment Management, a unit of MetLife Inc.
“Water Tower Place is a high-quality real estate asset that is well-positioned in the Chicago market,” said MetLife Investment Management spokesperson Dave Franecki in a statement. “While we cannot comment on specifics of this transaction, MetLife Investment Management has a proven track record in institutional real estate and a dedicated team in the Chicago area. We look forward to discussing the future of this iconic shopping destination with our clients and other key stakeholders.”
Water Tower Place has faced significant challenges over the last several years. In January 2021, the mall’s anchor tenant, Macy’s, announced it was vacating its space in the mall, leaving more than 300,000 square feet empty for the first time since the mall opened in 1975. The department store opened that year as Marshall Field’s; it had operated under the Macy’s name since 2006.
The vacancy was the largest on North Michigan Avenue in “at least a generation,” the Tribune reported at the time.
Target was in talks to open a space in the mall last year, although those negotiations had fallen through by summer. The Macy’s space in Water Tower Place remains vacant.
Other former Water Tower Place stores that have closed in recent years include Abercrombie & Fitch, Vera Bradley and Lettuce Entertain You Enterprises’ Foodlife food hall and Mity Nice restaurant.
The Water Tower Place transaction reflects Brookfield’s struggles finding a tenant for the space left vacant by the Macy’s exit, said Gabriella Santaniello, founder of retail research firm A Line Partners.
“How sad for downtown Chicago, or Michigan Avenue,” Santaniello said. She said malls around the country have faced similar struggles, but not typically malls in such prime locations in major cities.
Santaniello said the challenges at Water Tower Place are likely due to a confluence of factors, including the COVID-19 pandemic, the old-fashioned vertical structure of the shopping center and retail thefts along the Mag Mile. Possible solutions, she said, could include using some of the mall’s space for a gourmet food hall or offices.
