OAK BROOK, IL—With little new construction happening in retail real estate, and some tenants that are still vacating space, many landlords in this commercial real estate sector are looking to backfill empty stores. The Inland Group of Cos. (RECon booth C1027) is among them and has successfully executed these leasing deals, specifically in the Chicago area. Joe Cosenza, vice chairman and a director of the Oak Brook, IL-based firm, tells us about Inland's success in this arena.
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"The term 'backfilling' usually means, in construction, digging down to put in the footings for your house and then building the cement wall on top of it for your basement, all of which becomes your foundation," says Cosenza. "Once that is done, a backhoe or a front-end loader, comes in and fills in the gap that occurred between the dirt that was moved and the footings and cement wall that was built."
But Cosenza thinks about it differently in the retail space. "Well, in retail it means not having to use a backhoe or front-end loader, but your intelligence, to see who might fit in that one newly created vacant space. Backfilling was non-existent in 2008 through 2012, but in 2013 there are four examples of it in the Chicagoland area that Inland achieved.
"At Lincoln Village, in Chicago, a Borders went out of business and a Ross Dress For Less moved in. In Orland Park, at Ravinia Plaza, another Borders went out of business, and a Whole Foods Market took its place. An Office Depot closed at Rivertree Court in Vernon Hills, and we filled it with a Ross Dress For Less. Finally, in Crystal Lake, at Crystal Point, yet another Borders closed, and a Fresh Market was secured as a replacement. Backfilling by Inland where the rent is higher than the previous rent is what we call 'classic backfilling.'"
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