(WWJ) Lakeside Mall in Sterling Heights has been sold for $26.5 million.
According to a news release Wednesday, "five years of proactive strategy and planning by Sterling Heights City leadership" has helped secure new ownership for the sprawling shopping center, long-struggling since its heyday.
Miami, Florida-based commercial real estate fund Out of the Box Ventures closed on the property on Dec. 17 and will become the new owner of the mall immediately.
Long-term plans for Lakeside — the largest mall in the state of Michigan, with over 1.5 million square feet of retail space at Hall Rd. and Schoenherr — include adding new uses to the property other than retail over a period of time, officials say.
City leadership has been strategically planning the future of the Lakeside area, historically the city’s largest retail hub, for a number of years.
It was not immediately clear how long the mall may stay open in its current form, or what will become of the stores currently in business there.
“Our goal has always been to see Lakeside transform from a traditional retail mall into a mixed-use space focused on walkability, placemaking and community,” said Sterling Heights Mayor Michael Taylor. “I’m proud of the proactive work we’ve done to help position the Lakeside Mall area for continued success for many decades to come.”
Luke Bonner, Senior Economic Development Advisor for Sterling Heights, says he expects a market assessment and redevelopment plans to be released over the coming year.
New features, he said, could include residential, hotel and entertainment offerings.
"Lakeside is in a very, very desirable real estate location," he told WWJ Newsradio 950. "And I think that, above all, is the biggest driving force."
The city says efforts have included formulating the Lakeside Sustainability Plan in 2015, administering a retail market study in 2016 and continuing sustained, targeted outreach to retailers and developers interested in the Lakeside area as brick and mortar retail malls continued to decline across the nation. In 2018, the city adopted the Lakeside Overlay District that allows for a mixture of uses at the mall – an incentive to reimagine the 1.5 million square foot, 100 acre property.
“A redevelopment project of this magnitude could equate to hundreds of millions of dollars just for construction,” said Sterling Heights Senior Economic Development Advisor Luke Bonner. “But this project’s economic impact to the region could far exceed the construction value. It’s imperative that we work toward preserving this critical tax base and increasing the job base of 1,000 currently supported by Lakeside Mall.”
The mall was acquired by Out of the Box after General Growth Properties Inc. defaulted on their $144 million dollar mortgage loan. Out of the Box Ventures, officials say, has a history of "unlocking new value in formerly distressed commercial retail space and are scaling rapidly." The fund's vision is to transform retail spaces into dynamic mixed-use destinations, designed to be as functional as they are impactful in the revitalization of their surrounding areas and communities.
“We are excited about our plans to revitalize Lakeside Mall with a new wave of premium tenancy and engaging activations. One of the defining factors in our decision to close on this asset is the City’s progressive development culture. We share the City’s vision for the future of this property and look forward to significant collaboration with City officials and the community to ensure Lakeside Mall’s future is promising and a point of pride for the entire region,” said Ophir Sternberg, CEO & Founding Partner, Lionheart Capital. “We have a strong track record for success and expect nothing less for this exciting endeavor.”
Lakeside opened on March 2, 1976.