CHICAGO—Retail builders have spent many of the post-recession years just getting by on smaller projects such as luxury-oriented retail, which retained much of its demand, but 2014 may have something better in store. Englewood Construction, for example, a Lemont, IL-based general contractor, forecasts that more large-scale projects, as well as more fine dining and hospitality construction, will kick off in the coming year.
Englewood currently does about $40 million to $50 million of construction per year. They specialize in the construction of American Girl Place outlets such as the 53,000-square-foot location in Water Tower Place, fast food restaurants, hotels, shopping centers and many other types of retail. Englewood officials say they have hired several new employees in response to the new demand. And earlier this year, they told GlobeSt.com that the firm had recently tripled the size of their estimating staff.
“While small-scale projects and commercial construction renovation jobs sustained the industry in recent years, big projects are coming back as the economy continues to improve,” says William Di Santo, president of Englewood. “Next year, we will see a number of large, ground-up commercial construction projects that were once sidelined coming back into the fray.”
But rather than just going back to building new retail power centers, Di Santo believes much of next year's activity will instead consist of mixed-use construction projects that include a considerable amount of retail. He points to the New City development at Halsted St. and Clybourn Ave. in Chicago, which will include 360,000-square-feet of retail, a 199-unit apartment building and 40,000-square-feet of medical office space as an example. Its developers recently received a $182 million construction loan.
“Many developers are sitting on large parcels of land that they want to put into use, but plans have been altered to reflect the new economic reality,” says Di Santo. “While retail will still be a big portion of these projects, developers will also incorporate apartments, hotels and office space to make the project more viable to receive funding. We expect to see several of these projects initiated in the Chicago-area this year.”
Furthermore, Englewood predicts that in 2014 the market will see increased demand for fine dining restaurants, Di Santo adds. This year, Englewood completed a new Season's 52 on Chicago's Magnificent Mile as well as renovations and expansions on several high-end steak houses in downtown Chicago.
“We expect new restaurant construction to continue at a robust pace in 2014,” Di Santo adds. “However, it won't be just in the form of the fast-casual concept. Fine dining, white-tablecloth establishments are making a big push as the restaurant industry is performing remarkably well. This activity will continue as restaurants still offer an experience and entertainment value that the online market cannot compete with.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
