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CHICAGO-Marcus & Millichap predicts sales prices for retail prices will set another record this year, but has suggestions to investors looking to buy into the market. "Price-conscious investors might consider the northern suburbs of Woodstock, Spring Grove and Waukegan, where median prices are often at less than $50 per sf," according to its 2005 National Retail Research Report.

In addition, investors seeking above-average capitalization rates are advised to take a look at older properties on the city's South Side. The report notes large-scale investors have begun staking out that part of the city, as well as other areas with in-fill retail opportunities.

Meanwhile, the delivery of 4.4 million sf of new retail space will push the overall vacancy rate up to 11.2%. However, vacancy in Lake and McHenry counties and the far north suburbs will hover around 7.4%, according to the real estate firm. Effective rents are likely to increase 2.5% this year.