The building home to Neiman Marcus on Michigan Avenue is on the market as stores along the Magnificent Mile exit the struggling shopping strip.
UBS Realty Investors hired Jones Lang LaSalle to sell the four-story, 196,000 square foot store at 737 North Michigan Avenue occupied by Neiman Marcus since 1983, according to Crain’s. It’s the chain’s second most-profitable location and is expected to post $123 million in sales this year, according to JLL. Sales are up 5 percent so far this year compared with the same period in 2019, Crain’s reported.
The Cook County Assessor’s office valued the property at $46 million. It’s unknown, however, when Neiman Marcus’s lease ends — critical information that will determine how much the buyer will pay for the property. A longer lease will prove more lucrative by giving the owner more time to collect rent.
It’s also unclear whether a buyer can tear down the property to develop a new hotel or a residential building, Crain’s reported.
UBS bought the Neiman Marcus store and office space in 1998 for $104 million. It wasn’t until 2020 that UBS split up the retail and office space. The offices aren’t on the market,, according to JLL’s listing.
Retail on the Mag Mile has suffered during the pandemic. The vacancy rate climbed to 26 percent this year from 15 percent from 2019, Crain’s reported, citing Cushman & Wakefield. Closures have included Forever 21, Uniqlo, Gap and Macy’s.
Shopping malls and hotels in Cook County were hit last year as the pandemic battered the entertainment industry. They failed to pay nearly $500 million in property taxes last year, even after the county extended the deadline two months without penalty.
[Crain] — Connie Kim