Spirit Valley Mall

Highlights:

• Spirit Valley Mall is recognized as an anchor within the high-traffic West Duluth commercial hub, featuring other major retailers including Menard’s and Super One Foods a strong regional grocer in Northern Minnesota.
• Capitalize on Duluth’s status as a major tourist destination, welcoming approximately 6.7 million visitors annually who contribute over $780 million in direct economic impact, significantly expanding the potential customer base beyond local residents.
• Spirit Valley Mall offers direct accessibility and prominent visibility from Interstate Highway 35, the vital northern terminus of a transcontinental route, capturing the attention of both local traffic and regional travelers entering Duluth.
• The Spirit Valley district is identified by city officials as ripe for revitalization, with active planning efforts and community interest in transforming the area, including potential mixed-use developments and adaptive reuse of existing structures.
• Infill West Duluth location sits on 10+ acres of land, with over 157,000 square footage of built space. This allows for immense flexibility and creativity into full redevelopment across the parcels.
• The opportunity provides flexibility to add significant value through lease up, redevelopment & repositioning as well as future rent growth.
• Duluth functions as a critical regional center for banking, retail, and medical care for northern Minnesota, Wisconsin, and Michigan, ensuring a consistent influx of residents seeking services and commerce.
• City planners recently previewed the “Spirit Valley Core Investment Area Plan,” which establishes a roadmap for future public and private investment. The plan is designed to foster a vibrant neighborhood center by focusing on walkability, local storefronts, and new housing opportunities.

Description:

CBRE is pleased to exclusively offer for sale Spirit Valley Mall, a premier value-add retail investment opportunity located in Duluth, Minnesota. The offering consists of approximately 157,731 square feet of retail space positioned at one of the city’s primary gateway locations with exceptional visibility and direct access from Interstate 35. The asset presents investors with a rare opportunity to acquire a large-format retail property at a significant discount to replacement cost while executing a comprehensive leasing and repositioning strategy.

The property is comprised of two distinct components: an 86,479-square-foot former Kmart building and a 71,252-square-foot multi-tenant retail center. The former Kmart space offers exceptional flexibility for redevelopment, adaptive reuse, or a single large-format user, while the existing retail center is approximately 70% occupied by a diverse mix of local and national tenants, including Dollar Tree and the United States Postal Service. Overall property occupancy is approximately 30%, creating substantial upside through lease-up, tenant repositioning, redevelopment, or a combination of strategies designed to unlock long-term value.

Strategically located at the first Interstate 35 exit into Duluth along Central Avenue, the property benefits from outstanding regional accessibility, strong traffic exposure, and an established retail trade area. Surrounding big box retailers including Menards and Super One Foods generate consistent consumer traffic and reinforce the property’s position as a highly visible neighborhood retail destination. The combination of an irreplaceable location, significant vacant square footage, and flexible redevelopment potential creates multiple avenues for future value creation.

Duluth serves as the economic, healthcare, educational, and commercial center of northeastern Minnesota and the western Lake Superior region. As Minnesota’s fifth-largest city, Duluth has a population of approximately 88,000 residents and serves a much broader regional trade area extending throughout northern Minnesota, northern Wisconsin, and Michigan’s Upper Peninsula. The city’s diverse economy is anchored by healthcare, higher education, tourism, shipping, manufacturing, and government employment. Home to the Port of Duluth-Superior—the largest port on the Great Lakes and one of the nation’s busiest inland ports—as well as the University of Minnesota Duluth, The College of St. Scholastica, and Lake Superior College, Duluth continues to provide a stable and diversified economic foundation. Additionally, the city attracts approximately 6.7 million visitors annually, generating more than $780 million in direct visitor spending and further strengthening the long-term retail demand drivers supporting the investment.

Documents: