LaSalle Investment Management recently sold Geneva Commons, a big shopping center in Geneva, Illinois, to Lamar Companies for $63.7 million. This sale is a big deal because LaSalle sold the center for much less than what they bought it for in 2013. They paid $124 million back then, so this sale shows they lost almost half of their money.
This sale was managed by CBRE’s George Good, Richard A. Frolik, and Christian Williams. It’s part of a trend where shopping centers in the suburbs are being sold for less money, which shows that it’s tough for these kinds of places. It also shows that property owners and investors are facing more financial problems.
The Wider Picture of Struggling Sales
The sale of Geneva Commons isn’t just about one shopping center – it shows a bigger problem hitting suburban malls across Chicago and maybe even the whole country.
In the last couple of years, Barry Steinlicht’s Starwood Capital had trouble paying back loans for three suburban malls in Chicago, totaling $232 million. They also sold another mall for about half the price of its loan.
These financial troubles point to a bigger issue in the retail property market. The way people shop is changing, with more shopping done online, and this is hitting traditional stores hard. This sale is also the second big financial problem for LaSalle Investment Group in two years, after losing 20% on the sale of The Woodview Apartments in Deerfield.
Looking Back and What It Means
When LaSalle Investment Management bought Geneva Commons, it was already in trouble. The previous owners, two groups linked to Invesco based in Atlanta, couldn’t pay back a $76 million loan.
The shopping center was struggling with lower rents and less money coming in, showing the bigger issues in the retail sector. The sale to Lamar Companies, funded by a $60.2 million loan from Banc of California, might give Geneva Commons a new start. But it’s also a warning for investors in suburban retail spaces.
Looking back at this sale and what it means for the future of retail property investment shows how important it is to manage assets wisely and respond to changes in the market. LaSalle Investment Management lost a lot of money on the Geneva Commons sale to Lamar Companies, showing how tough the suburban retail market is.
This sale is part of a bigger trend where property owners are struggling. It’s a crucial time for investors and others involved in retail property. As people shop differently and buy more online, the future of suburban malls is unclear.
Investors and property managers need to plan ahead and maybe change how these spaces are used to keep up with what shoppers want.
