Overall, retail sales should be flat in 2001, says Robert Michaels of General Growth Properties, with vacancy rates avering 7.5%. "The thing to remember about retail, it was never as good as people said it was in 2000, or as bad as they say it'll be in 2001," Michaels said.

However, A. Rick Scardino, vice president of Grubb & Ellis' retail services group, suggests a land of opportunity for new retail development lies west of Randall Road, a north-south highway connecting suburbs on the western fringe of the Chicago market--residential growth is stretching it to Illinois Route 47--or south of the end of Interstate 355, which has a chance to be extended. "Retailers need to follow, just like homeowners do, the road network," Scardino says, which has brought development to farflung villages such as Elburn, Manhattan, Mokena and Oswego.

One example of a lifestyle shopping center is the recently opened Town Square in the affluent northwest suburban bedroom community of Deer Park, where the demographics are "off the charts." Scardino says the new lifestyle centers "will serve affluent pockets that have been underserved in the past."

Town Square was built in response to the perceived threat to retailers by the Internet, Scardino says. That threat may have been as overblown as Y2K, others suggest. "We're learning e-commerce is not a threat to the store, but a tool," says Hugh F. Kelly, CRE, chief economist for Grubb & Ellis' Landauer Realty Group Inc. "E-tailers will become profitable when they open stores."

Other trends worth watching in 2001 will be the explosion of health clubs in the Chicago market, perhaps taking space left by some theaters, Scardino predicts. And in addition to continued redevelopments of suburban Downtowns, "look for rehabbing of tired properties and the rebirth of merchants associations as owners become increasingly proactive."

Michaels has a Top 10 list of hot retailers to watch, some of them just entering or planning to debut in the Chicago market: St. Louis-based children's store Build-A-Bear; H&M, which he calls "the Limited and Gap of the future;" catalog retailer J. Jill, already in Water Tower Place on North Michigan Avenue; apparel retailer Chico's; cosmetic retailer Sephora; apparel retailer Zara; home furnishings retailer Pottery Barn; restaurant chain Legal Sea Foods; apparel retailer Mango; as well as standbys Crate & Barrel and the Gap.