The owner of a struggling shopping center in Highland Park is courting developers for the property after getting the village’s approval for a big residential project there last year.
Los Angeles-based Balboa Retail Partners has hired Jones Lang LaSalle to sell the 7.6-acre parcel at 1610 Deerfield Road, the site of a shopping center that lost a Toys R Us store in 2018, when the chain went out of business. After a zoning change by the village last November, a developer could buy the property, raze the building and construct as many as 381 apartments on the site, according to a JLL brochure.
The property “represents a rarely available development opportunity of scale in a coveted Lake County location,” the brochure says. It’s “a short distance from popular dining, shopping and entertainment options in both downtown Highland Park and Deerfield.”
The strategy makes sense given the state of the retail market, which was already weak before the coronavirus pandemic sent the economy into a recession.
Filling the empty 49,000-square-foot Toys R Us store has only become harder since then. Many national retail chains are permanently closing stores by the dozens. Coresight Research, a retail research firm, forecasts retailers will close as many as 25,000 U.S. stores for good this year, topping the prior record of 9,800 closings in 2019. Competition from e-commerce retailers has only intensified as a result of the coronavirus.
Though apartment landlords are struggling, too, the prospects for the multifamily market are stronger. Selling to an apartment developer could deliver a larger and faster payout for Balboa than trying to fill the shopping center. Including the Toys R Us space, about 64 percent of the 104,500-square-foot property is vacant. Petco is the shopping center’s largest remaining tenant.
Executives at Balboa and Chicago-based JLL did not return phone calls.
Still, lining up financing for a large apartment project is likely to be much harder than it was before the pandemic. Uncertainty about the direction of the economy and real estate market has made lenders and equity partners more cautious, which could limit development at least for the next several months.
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June 12, 2020 at 12:28AM
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Suburban Chicago Highland Park shopping center for sale two years after losing Toys R Us store - Crain's Chicago Business
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