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CHICAGO-Signs of a retail recovery in Chicago are sagging, as anchor stores are again closing more than they are opening, according to a CBRE survey report. Since a year ago, 2.3 million square feet of new anchor store deals were completed in the Chicago area, but 2.6 million square feet of anchor space was put on the market.
Joe Parrott, senior vice president of retail services at the Bannockburn, IL office of the company, tells GlobeSt.com that there was a much bigger negative disparity in 2009, right after the recession, but that the past couple of years were moving into positive territory. “In 2010 there were only 600,000 square feet of anchor closings,” he says. “Contrary to the expectations that we were heading toward a landlord’s market, it appears the recovery has stalled.”
There are 67 retail anchor spaces over 20,000 square feet that are now offered for sale, Parrott says. The biggest loss was Borders, which dumped 500,000 square feet on the market at once, and Office Max, Lowes, Dominicks and Sports Authority are also closing stores in the Chicago area (Sears has spared its headquarters state from its closures, possibly because it received a large state incentive package in 2012). The average market time for spaces leased in the past year was 28 months, compared with 36 months for those spaces still on the market, he says.
“I think we’ll continue to see more closings into 2012, but there won’t be a giant swing of more or less,” Parrott says. “The balance of closings and openings will keep us at this high level of anchors on the market.”
One surprising savior has been discount health clubs, he says. Previously shunned by large retail centers, these companies such as Planet Fitness have gained much greater acceptance and are now sought after by many owners looking to add new energy and daily traffic to their properties, Parrott says.
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