MVF continues to monitor planning and economic development initiatives to revitalize the Lakeforest Mall property (102 acres total), which abuts Montgomery Village. Jones Lang LaSalle (JLL) has been hired by the owner of the core property (any areas not owned by the four anchor stores) of Lakeforest Mall to market and seek proposals for sale of this 47.7-acre property.
The property has been marketed before, and this time, the process outlined by JLL called for an online auction in late March. JCPenney, Macy’s, Sears and Lord & Taylor each own their individual spaces, and full-scale changes would require that the buyer either purchase those properties or reach an agreement between all property owners. It has also been announced that JCPenney would be closing as part of a plan to close 27 of their stores nationwide.
The mall first opened on September 12, 1978. The food court in the mall was later renovated and expanded in 2000 by the original developers and owners, Taubman Centers. Taubman later sold the asset to Simon Property Group in 2007, and the property changed hands again in 2013 when it was acquired by Five Mile Capital Partners.
The last owner paid well over $100M for the property, but later lost its ownership interest to a bank because of financial difficulties. Some estimate the property’s value at less than $30M due to retail market conditions and the difficulty of redeveloping the property in coordination with the four other owners of the anchor properties.
Lakeforest Mall falls within one of 14 identified Opportunity Zones (OZ) in Montgomery County. The OZ offers incentives in the form of deferred and reduced taxes on capital gains to attract private capital for investment in areas selected by each state.
The property is zoned C-2 (General Commercial) per the City of Gaithersburg. The C-2 Zone is intended to provide regional shopping opportunities. The city has shown willingness to work with developers to encourage redevelopment, most recently in its successful effort to proactively add the property to one of the county’s “Enterprise Zones.”
The city’s master plan calls for Lakeforest Mall to be redeveloped into a large-scale mixed-use development similar to Crown Farm.