STERLING HEIGHTS, MI
MULTI-TENANT RETAIL CENTER
Not too long ago, a Target-anchored center situated within The Marketplace Court in Sterling Heights, MI was considered one no one wanted. But, SimonCRE could see the opportunity behind the underpopulated property owned by a receivership.
Acquiring the center from a special servicer of course meant the previous loan had been in default, and the receivership had taken over as the active property owner and manager.
Because of the type of ownership and significant title issues, many prospective buyers were deterred. The special servicer needed a surety of close. On top of that, there were many short-term leases and concerns about the length of the lease for the co-anchoring major theater, which had some deferred maintenance as well.
The main draws, Target and Ruby Tuesday, were both quickly approaching the end of their initial terms, and it was unclear if either would extend their leases. That was a risk many did not want to take, especially during that economic climate in Detroit.
It was unheard of at the time, but national developer, SimonCRE kept its eyes on the prize and wasn’t afraid to take on the risk and challenges. The developer/owner partnered with an out-of-state lender and underwent the plat process to parcel off the majority of the center.
Next, negotiations for lease renewals on some of the larger tenants were solidified, and capital expenditures and re-tenanting most of the small retail spaces took place over the course of a couple years. Any retail space that could be better utilized was demolished and extensions were worked out.
Although SimonCRE had purchased the center at the depths of the recession, it’s clear that the “bull’s eye” had been hit when it came to bringing color back into the Marketplace Court. The developer updated the uses to reflect the new reality of brick and mortar by adding e-commerce-proof tenants. The shopping center was then sold in August 2017.
In February 2019, Fiat Chrysler Automobiles (FCA) announced it would be investing $4.5 billion in Southeast Michigan, including $400 million for the construction of an auto assembly plant across from the Marketplace Court. This initiative will bring 6,500 new jobs and more consumers to the area.
“We took on this challenge that others did not want to take a chance on, and I feel fortunate to say we were able to make a lasting impact on the community,” said Joshua Simon, Chief Executive Officer and Founder of SimonCRE. “The news of FCA also choosing to invest in this area goes to show that they see the potential for growth, too.”