Feature
Urban Real Estate Fund Redevelops Mall in Milwaukee as First Investment
by Elisabeth Pena
The 55-acre Capitol Court Shopping Mall in
Milwaukee, WI is being redeveloped as the first investment of the national urban
real estate fund Canyon-Johnson Urban Fund LP. The $300 million fund plans to
redevelop the mall through a partnership with Boulder Venture of Milwaukee. The
$53 million project, which will be renamed Midtown Center, will include the
demolition of the existing mall, followed by the construction of about 606,000
sq.ft. of retail space anchored by a 150,000 sq.ft. Wal*Mart. The center also
will include national credit retailers, entertainment components and
restaurants. Construction at the center began in September and Wal*Mart is
slated to open in May.
The Milwaukee investment is inline with the fund’s investment strategy, which is
to identify, enhance and capture value though the acquisition, development and
redevelopment of urban real estate and the origination of mortgages secured by
urban real estate. Owned by Canyon Capital Realty Advisors LLC, a money
management firm, and Johnson Development Corp., the closed-end real estate fund
expects to provide for and foster economic opportunities for under-served urban
neighborhoods.
The Midtown Center project epitomizes the opportunities available in urban
America say executives at the Canyon-Johnson Urban Fund. The Midtown Center
market place has a large population with spending power and lacks service and
amenities. “This is prime real estate,” says Kenneth Lombard, comanager of the
Canyon-Johnson Urban Fund. “It is well located, there is a great density of
population and an underserved community that begs for this type of quality
service and option. [Investing in the Midtown Center] was a no brainer, all the
types of things we look for in purchasing a property like this were there.”
Midtown Center - Milwaukee, WI
Executives in charge of the deal say the fund was created to capitalize on
existing opportunities and fill existing demand, not to create demand. “There is
a mismatch between supply and demand,” says Bobby Turner, comanager of the
Canyon Johnson Urban Fund. “Capital Court is a perfect example of density of
population and spending power. This is not regentrification, but a
revitalization of an existing community.”
The fund plans to seek joint ventures with local owner operators, as well as
opportunities that could be provided through the joint ventures of the Johnson
Development. Founded by Earvin “Magic” Johnson in 1993, Johnson Development
works to provide a business stimulus fostering local economic growth and
creating financial empowerment in neglected minority urban and suburban
neighborhoods. The company develops movie theaters, restaurants and coffee shops
and is involved in 50/50 joint ventures with Starbucks Coffee, T.G.I. Friday’s
Restaurants and Magic Johnson Theaters. The fund’s managers say they are taking
a close look at all the tenancy options that Johnson Development is involved in.
The fund is in the early stages of discussions to fill other spaces at the
Midtown Center.
Additional investment opportunities across the country also are being sought by
the fund. Fund managers say they are very opportunistic in terms of locations
and are considering the midwest, New York City area and eastern seaboard. Fund
executives say they are looking to acquire grocery-anchored centers with a
minimum GLA of 100,000 sq.ft. Entertainment and retail are not the only types of
opportunities that the fund is interested in, managers also are looking into
opportunities for affordable housing and industrial, manufacturing and
distribution development.
For more information, contact Kenneth Lombard, Johnson Development Corp., 9100
Wilshire Boulevard, Beverly Hills, CA 90212, 310-247-1994, or Bobby Turner,
Canyon Capital Realty Advisors LLC, 9665 Wilshire Boulevard, Suite 200, Beverly
Hills, CA 90212-2309, 310-247-2700; Web site:
www.canyoncapital.com.