Big Lakeshore Mall Changes Hands

August 29, 2003
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NORTON SHORES — The retail power center that marked the beginning of what is now a rapidly growing commercial/retail corridor in Muskegon County has been sold to a Detroit-area real estate investment trust.

Southfield-based Ramco-Gershenson Properties Trust recently acquired the 361,000-square-foot Lakeshore Marketplace from Horizon Group Properties for $22.5 million.

The owner of 63 shopping centers in 12 states that have a combined 12.5 million square feet of leasable space, Ramco-Gershenson sees Lakeshore Marketplace — with 23 storefronts and adjoining space for another anchor tenant and four outlots — as "an excellent addition to our portfolio," President and CEO Dennis Gershenson said.

And right now Ramco-Gershenson Properties sees West Michigan as a good market to add to its property holdings.

"As you look at the growth of our company, it makes sense to be in that part of the state. There's plenty of opportunity out there," said Rich Smithy, chief financial officer for Ramco-Gershenson.

"It's a good, healthy market."

In announcing the acquisition, Ramco-Gershenson Properties Trust cited a study of the the market trade area that extends 10 miles south and north of the Sternberg Road-Harvey Street retail corridor.

The study indicates the zone has a population of 177,000 people and is expected to grow 5.9 percent over the next four years.

And just about 10 miles from the Lakeshore Marketplace, Ramco-Gershenson also is developing a Home Depot home improvement store. That project is in the north end of Grand Haven, an area that is to undergo a substantial upgrade in the next few years (see separate story).

Ramco-Gershenson also owns the 285,564-square-foot Kentwood Towne Centre in Kentwood.

The company, which generates nearly 50 percent of its annual revenue on Michigan properties, indicates it will look for additional opportunities in the region that make sense.

"We are very excited about that entire area," said Rich Gershenson, executive vice president.

Horizon Group Properties, which also owns the Horizon Outlet Center in Holland, acquired Lakeshore Marketplace in 1998, three years after it opened.

At the time of the acquisition, the shopping center's occupancy rate was 67 percent. It is now "virtually 100 percent occupied," the company said.

"Anytime you do that, there's a profit to be realized," Horizon Group Properties Marketing Director Gina Slechta said in explaining the sale.

Lakeshore Marketplace was the first major retail development at the Sternberg Road and Harvey Street intersection.

The center's development was on the forefront of a major retail buildup that continues today in the corridor.

Past projects include the Menard's home-improvement center, nationwide electronics retailer Best Buy and, in the biggest development, the opening of the Lakes Mall two years ago, plus an assortment of restaurants and small retail sites.

Additional developments planned or in the works in the vicinity include the Lakes Crossings shopping center, across Harvey Street from the Lakes Mall, which will feature a Kohl's department store as well as professional offices and residential developments along Harvey Street.

Harvey Street is the dividing line between Norton Shores on the west and Fruitport Township on the east.

While Horizon Group Properties sold off the shopping center, the company still holds sizeable acreage in the corridor. Horizon is actively marketing for sale or development seven parcels totaling 110 acres surrounding Lakeshore Marketplace.

The Chicago-based Horizon Group Properties, which now owns nine outlet centers in seven states with a combined 1.8 million square feet, will consider the outright sale of parcels or partnerships for specific projects, Slechta said.

"We're working on all sorts of different combinations," she said. "There's no limit on what you can put in that area. It's definitely a hot corner."

Tom Rumptz, the senior vice president for Horizon Group Properties who handled the sale, says the parcels Horizon holds will benefit from their close proximity to the Lakes Mall and the significant commercial and retail development that has occurred in the Sternberg-Harvey corridor in recent years.

Rumptz said he is directing the sale of additional parcels.

"The parcels include new development opportunities which are ideal locations for retail and other ancillary uses which complement this emerging retail and service corridor," Rumptz said.       

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