Mike Havdala, senior vice president of retail brokerage for Chicago-based HSA Commercial Real Estate.
CHICAGO—As reported in GlobeSt.com, last week the International Council of Shopping Centers held its Chicago Deal Making conference at Navy Pier. The two-day event was well-attended, and participants tell GlobeSt.com that the energy level was reminiscent of pre-recession days.
“It was an active show with an optimistic feel,” says Mike Havdala, senior vice president of retail brokerage for Chicago-based HSA Commercial Real Estate. His take is that even though the market may not see much new construction, many owners are interested in repositioning the properties they do have in strong trade areas.
New construction is unlikely at this time partly because many in the sector are still worried about how in recent years the market lost whole classes of retailers. Video rental and record stores, for example, are finished, Havdala says.
What gives him hope is that retailers continue to experiment with new ideas. Fast casual restaurants, some that reimagine the pizza concept, others that create new burger outlets, have become more prominent at trade shows like ICSC. And gyms such as LA Fitness are also changing the way space is used at existing centers. And that's a necessity, especially as online shopping has decreased, perhaps permanently, the demand for space.
Kohl's was one of several retailers to recently launch an off-price concept. In 2015 it opened its first Off/Aisle outlet at HSA's The Mayfair Collection. HSA created this shopping center in Wauwatosa, WI, a suburb of Milwaukee, by repurposing functionally obsolete warehouse buildings into a contemporary retail environment. The Off/Aisle stores will sell returned merchandise at marked down prices, and all sales will be final.
Macy's and Lord & Taylor also launched off-price concepts last year. Moody's projects off-price apparel growth of 6% to 8% over the next five years, versus 4% for the broader apparel market.
“The jury is still out,” Havdala says, on this new type of store. But “retail is definitely trying to evolve.”
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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.
