Retail Remains Vibrant in Chicagoland Market

CHICAGO-According to details obtained from both CB Richard Ellis and Marcus & Millichap, the Chicagoland retail market has been in a state of sustained growth and is balanced from the standpoint of supply and demand. Over 275 retail firms are looking for space or are planning to expand in the Chicago metropolitan area. Big box retailers continue to anchor much of the new construction, which parallels the growth in residential construction both in the city and outlying suburbs. Marcus & Millichap predicts that with the variety of national retailers coming into the Chicagoland market, new retail construction growth will continue for several years.

Currently, the most desirable retail property type in the Chicago metropolitan area is the grocery-anchored strip shopping center. Michigan-based Meijer entered the market this year with at least five stores planned for Chicagoland. Dominant grocer Jewel plans 10 more stores. In second place is Safeway-owned Dominick’s which plans five more stores. Marcus & Millichap predicts that grocery-anchored strip centers will sell for $100-$160 per sf, community anchored strip centers for $90-$150, power centers for $80-$120 and unanchored strip centers for $80 per sf to $130 per sf.

The Chicagoland area will also experience high competition from drug retailers. CVS entered the market this year and plans to expand to about 100 new stores over the next several years. Deerfield, IL-based Walgreen’s plans to meet the challenge by opening 25-40 more locations per year in the market over the next few year. Rite-Aid is expected to enter the market in 2001 as well.