CHICAGO—Retail developers will continue to create about 2-million-square-feet of new retail space per year in the Chicago metro area according to the Chicagoland 2015 Shopping Center Report by Mid-America Real Estate Corporation.
In 2014, developers put up 2.40-million-square-feet of new shopping centers; a 6% increase from 2.26-million-square-feet in 2013. However, the Oakbrook Terrace, IL-based firm anticipates a 14% decrease with about 2.06-million-square-feet planned for the coming year.
And even though new development has grown significantly since 2011 when new retail space hit an all-time low of 1.03-million-square-feet, Andy Bulson, Mid-Americaprincipal/director of suburban tenant representation and author of the report, says new development between 2.0 and 2.5-million-square-feet per year will be the norm in Chicagoland.
“Large anchor retailers like Kohl's and Target have largely completed their Chicago expansions, while a multitude of grocers are still working to absorb the market share vacated by Dominick's,” says Bulson.
The process of dividing up that market share means that grocery will continue to drive development activity, Mid-America reports. Of the fifteen centers developed in 2014, twelve were grocery-anchored, and grocers will also anchor nine of the eleven centers planned for the region in 2015.
Walmart and Mariano's continue to lead grocery development with 564,000-square-feet and 483,000-square-feet developed in 2014 respectively. And in 2015, Mariano's plans to develop an additional 525,000-square-feet with Walmart close behind at 390,000-square-feet.
Local development or self-development by major retailers will also continue to dominate into 2015. Five of the centers developed in 2014 and three of those planned for 2015 will be self-developed, according to Mid-America. And local developers created six of the 2014 centers and will build seven of those planned for 2015.
“The local developers know where the opportunities are in Chicagoland, where there is a need for retail, and which markets are growing,” says Bulson. “The involvement of larger developers or REITs is typically related to the financing of the projects.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
