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Acadia Realty Trust takes a hit on Michigan Avenue property

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Rather than trying to fill vacancies in a depressed market, investors can maximize property value by selling to developers who build towers with apartments and hotel rooms on site. I can do it.

Acadia Chief Financial Officer John Gottfried told analysts on a conference call:

Chicago is one of Acadia’s largest markets. The company’s holdings here include retail facilities on the Gold Coast, Lincoln Park and The Loop. One of the biggest investments in cities is Sullivan Center It’s on State Street, where Target and other retailers line up.

But Acadia has plenty of money aboard North Michigan Ave. In 2014, a REIT paid $144 million for an 88% stake in a building at 840 North Michigan.Paid Acadia Fund $104 million For 717 N. Michigan in 2017.

H&M’s loss leaves North Michigan 840 with one tenant, Verizon, occupying approximately 27,000 square feet (31% of the building). The whole block was hit hard. In addition to the Water Tower struggle across the street, his 117,400-square-foot building next door at 830 North Michigan is completely empty after its last tenant, Uniqlo. Closed in August 2021. property went up for sale during the summer.

Acadia could sell the 840 N. Michigan for millions. Even if it’s completely empty, it’s such a prized place that developers pay so much for a property.

However, recent impairment charges have brought the carrying value of assets on Acadia’s balance sheet to near zero. Acadia had her building at $51.5 million at the end of the second quarter. A charge of $50.8 million reduces its value to about $700,000.

“North Michigan Avenue is suffering from headwinds that the rest of Chicago is already recovering from,” Bernstein told analysts yesterday. There’s a mall across the street from us with a water tower that was once an iconic asset but needs to be reinvented. maybe.

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