Developer Buys Prairie View Plaza Shopping Center In Morton Grove

MORTON GROVE, IL — A newly-formed investment group led by a west suburban developer has closed a deal to buy a Morton Grove shopping center. Prairie View Shopping Center, located at the southeast corner of Waukegan Road and Dempster Street, was purchased by Kensington Development Partners, a developer from Oak Brook, and the U.K.-based commercial real estate investment firm IM Properties. The new owners said the site has potential for a mixed-use redevelopment with residential, hotel and medical offices in addition to existing retail, restaurant and entertainment uses.

Morton Grove Mayor Dan DiMaria said the village would be dedicated to working with the developers to revitalize a 26-acre property, currently the site of a 310,000-square-foot shopping center.

“We are very excited about and embrace a new approach and a comprehensive vision for Prairie View Plaza,” DiMaria said, in a release announcing the deal. “Additionally, we’re thrilled to now be working with an active investment group that has been successful on numerous other projects, as opposed to the passive investors that previously owned the property.”

A joint venture between Kensington and IM paid $11.3 million to purchase the site earlier this month, according to property records. The strip mall in the 6700 block of Dempster Street was built in 1963 had been owned since 1978 by a trust connected to the Canadian company Federal Construction. Its new owners said there are a variety of options for transforming the site, which the village has been seeking to rebuild for years.

“A well-positioned site in a demographically-rich market like Morton Grove, with extensive barriers to entry, has great potential for success,” said Kensington Development Partners Principal John Schoditsch. “Our goal, with the support and collaboration of Village President Dan DiMaria and the Village of Morton Grove, is to create a vibrant, sustainable development that will be at the center of activity for the community for a long time to come.”

Retail vacancies have been on the rise in the Chicago area. The average asking price for rent has dropped and retail vacancy increased from 11.4 to 11.6 percent in the second quarter of 2018, according to research from commercial real estate firm CBRE. But when those numbers are broken down by submarket, the 8.1 percent vacancy rate in north suburbs is the third-lowest in Chicagoland, trailing only the West Suburbs and the Chicago's North Side.

The existing Bank of America parcel and a center strip currently anchored by Starbucks will remain, regardless of the plans for redevelopment, according to the developers. Other current tenants at the shopping center include LA Fitness, Dollar Tree, The Salvation Army and several furniture or mattress stores.

More than a third of the space at the shopping center was empty at the time of sale, Crain's Chicago Business reported. The developer said talks about the property are underway with multiple retailers, including some big box grocery stores, but the site would be in need of redevelopment.

“The community deserves something nice and upscale and new,” Schoditsch told Crain's.

The village created a Dempster/Waukegan tax increment financing district in the area intended to revitalize the shopping center prior to Dominick's departure in 2012. Then in 2014, village officials met with two grocery store chains, including Meijer, but no agreement was reached.

"This is probably the most frustrating thing that I've encountered in being the mayor of this village," DiMaria said during a February 2017 status update about proposed development about the property.