Monday, September 10, 2007

Today's new word of the day: "de-mall"

I have posted in the past regarding 700 N. Michigan and the saga to lease the mall up. Today's news is probably good in that the owners seem to have gotten beyond that to a large degree by deciding to "de-mall" the mall.

With Spanish retailer Zara reportedly taking 30,000 sf and replacing Talbott's, the owners have apparently decided that enough is enough with a traditional mall. The atrium and common areas will be replaced largely with more tenant space (thus decreasing the load factor that is usually charged to tenants as part of taxes and operating expenses, and all the space fron the fourth (and maybe even the third) up to the eighth will be marketed for a hotel use. The bad news on a hotel is that the low floors with no views are not exactly prime. The good news is a prime location and demand for rooms, and maybe view is not that important anyway. Look at the Peninsula. Not the greatest views if any, but it is hands-down my favorite downtown hotel.

All in all? Good thinking by ownership in my opinion. For whatever reason and in spite of its locational advantages, 700 N. Michigan just never stuck as a primo address in spite of the efforts of some of the best in the business to make it so.