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What’s ahead for Southridge? By Maredithe Meyer, staff writer With a sheriff’s foreclosure auction on the horizon, Southridge Mall in Greendale faces an uncertain future. Real estate experts point to national trends as an indicator of what could be next for southeastern Wisconsin’s largest shopping mall. During the rise of Amazon and e-commerce, regional malls across the country have suffered; property owners have been forced to
adapt by downsizing retail space, attracting unique or experiential tenants, and adding a mix of uses such as office and residential. Southridge was once anchored by five big-box retailers, but is now down to two anchors: JCPenney and Macy’s. It has attempted to fill vacant space with fresh tenants and attractions such as Dick’s Sporting Goods, Golf Galaxy, Round 1 Bowling, TJ Maxx
BY THE NUMBERS More than
196,000 TICKETS
were sold for the “Beyond Van Gogh” immersive art exhibit during its seven-month run at the Wisconsin Center in downtown Milwaukee. 4 / BizTimes Milwaukee JANUARY 24, 2022
and Sixty to Escape. The challenges faced by Southridge and other malls were only exacerbated by the COVID-19 pandemic. After failing to make mortgage payments for the mall in May, June and July 2020, Southridge owner Simon Property Group defaulted on its loan. Its lender filed the foreclosure lawsuit in December 2020 in Milwaukee County Circuit Court. Simon agreed to foreclosure, with debt for Southridge topping $121.3 million and growing. Whoever purchases Southridge Mall will likely be drawn to its land value more than anything else because “the buildings aren’t going to be all that usable,” said a Milwaukee-area retail real estate broker who didn’t want to be named. He anticipates the property will be broken up and redeveloped into residential and potentially some office. Plans are already underway for a mixed-use development project at the former Boston Store site at Southridge, which was acquired last year by the village. Milwaukee-based Barrett Lo Visionary Development plans to develop a residential complex with up to 790 apartment units and underground parking, as well as 50,000 square feet of retail and commercial space at the former Boston Store site. But those plans may be
premature, said Nick Egelanian, president of Maryland-based consulting firm SiteWorks Retail Real Estate Services. He said mall properties are most attractive when the buyer can purchase and control the whole site – in the case of Southridge, 100 acres of prime real estate. He drew an analogy between a troubled regional mall and an old car that ends up in a junk yard. The junk yard operator (the buyer) sells parts of the car (outparcels and department store pads) for scrap value. The leftover metal is then crushed, melted down and used to create a new car. “If you think about it in mall terms, all that’s left at the end is the land,” said Egelanian. “Now you have 100 acres of land, which, if you control all of it, is an amazing piece of land … but it’s basically junk as it relates to its prior life as a mall. “If the community is smart, it would have let it get all the way down to that junk yard level, that scrap level, so that they could now attract somebody to the whole 100-acre piece. That could be a new mixed-use center, a sports stadium, housing, an Amazon warehouse, hotels.” When the property is broken up “too early,” he said, it could lose value and be seen as less attractive to potential buyers. n
