SOUTH BEND, IN—The economic crash left a multitude of retail shopping centers throughout the Midwest either shuttered or wallowing in bankruptcy proceedings. But today, firms like Great Lakes Capital are moving in to buy up these properties and put some life back into them. The South Bend, IN-based firm, for example, has just scooped up the 11 properties in the Silvercreek Retail Portfolio, shopping centers located in small cities west of Indianapolis through Northern Indiana that were sold through a special server.

“We think that there is tremendous value there,” Jeff Smoke, director of development for Great Lakes, tells GlobeSt.com. “The properties are right in our geographic area, all within about two hours, so we have a lot of local market knowledge.”

Smoke estimates that the centers, which range in size from about 5,500-square-feet to about 25,000-square-feet, and are in smaller cities like Greencastle, Warsaw, Elkhart and Plymouth, have an average occupancy of about 56%. However, the firm picked up the centers “for the right price, and that gives us a lot of options” to bring them back to their full operating potential.

The properties total about 150,000-square-feet, and were purchased by Great Lakes through their Credit Opportunity Fund I. The firm launched the fund last summer to purchase distressed assets, and although Smoke can't give details about the fund or the purchases, he does say it has used 35% to 40 % of the funds' assets.

He adds that the struggles of these particular properties “were just a symptom of the financial crisis,” with many getting overleveraged. With the end of the recession and the modest recovery, the centers should perform well. “Some are already set and just need our leasing team to take over, answer calls, and take care of clients.”

The centers should not have much difficulty drawing shoppers, according to Smoke. Walmarts shadow-anchor four or five of the centers and the remainder sit along their respective city's main street. “We also like these centers because they have a lot of stores that can't be cannibalized by e-commerce,” he says, such as gyms, hair salons and other service-oriented outlets.

“We buy notes and real estate across the Midwest region, all the way down to Arkansas and even over to Pennsylvania,” Smoke adds. And like these Indiana cities, he believes the region has come back and properties like this are now worth the risk. “I think most of the towns are in a similar position.”