CHICAGO—The development of new shopping centers throughout Chicagoland continues to proceed at a relatively slow pace. Developers now usually finish between one and two million square feet of new retail development per year, according to Chicagoland 2017 Shopping Center Report by Mid-America Real Estate Corp. But although the years of five million plus square feet of new retail are gone, grocery-driven projects and smaller footprint urban developments are here to stay.
Shopping center development in the region fell from 2.07 million square feet in 2015 to 1.5 million square feet in 2016, a 26% decrease, Mid-America found. The firm anticipates another 31% decrease for 2017, with an all-time low of about one million square feet planned for the coming year. The data show that new shopping center development has decreased by 79% since 2005. But that doesn't mean the world of retail has become stagnant.
“The reality is retail, like other industries, is changing to adapt with customer expectations and preferences,” says Andy Bulson, Mid-America principal/director of suburban tenant representation and author of the new report. “While new construction is not as robust as previous years, adaptive reuse of existing retail space continues to offer an opportunity for expanding retailers.”
Mattress Firm, for example, hit Chicagoland in a big way two years ago, acquiring several local competitors and opening many new outlets. It now has more than 200 stores in the region.
Part of the reason new construction numbers have sunk so low is that even tenants looking for new space have turned cautious, and want smaller footprints. Bulson points out that the number of new developments and expansions has remained relatively steady over the past three years. Developers finished 13 new developments in 2015 and 14 in 2016, and plan to finish another 11 projects in 2017.
He attributes most of the Chicagoland area's growth to just two specific mass merchandisers: Meijer and Wal-Mart. Meijer led the way by developing 387,000 square feet in 2016, including 192,000 square feet of retail space in suburban Flossmoor, and 195,000 square feet in Round Lake.
Wal-Mart also opened two new locations in the Chicago suburbs in 2016. The mega-retailer built a 182,000 square foot store in Olympia Fields, and a 195,000 square foot store in Richton Park. But the company does not have any plans for local new development in 2017.
CHICAGO—The development of new shopping centers throughout Chicagoland continues to proceed at a relatively slow pace. Developers now usually finish between one and two million square feet of new retail development per year, according to Chicagoland 2017 Shopping Center Report by Mid-America Real Estate Corp. But although the years of five million plus square feet of new retail are gone, grocery-driven projects and smaller footprint urban developments are here to stay.
Shopping center development in the region fell from 2.07 million square feet in 2015 to 1.5 million square feet in 2016, a 26% decrease, Mid-America found. The firm anticipates another 31% decrease for 2017, with an all-time low of about one million square feet planned for the coming year. The data show that new shopping center development has decreased by 79% since 2005. But that doesn't mean the world of retail has become stagnant.
“The reality is retail, like other industries, is changing to adapt with customer expectations and preferences,” says Andy Bulson, Mid-America principal/director of suburban tenant representation and author of the new report. “While new construction is not as robust as previous years, adaptive reuse of existing retail space continues to offer an opportunity for expanding retailers.”
Mattress Firm, for example, hit Chicagoland in a big way two years ago, acquiring several local competitors and opening many new outlets. It now has more than 200 stores in the region.
Part of the reason new construction numbers have sunk so low is that even tenants looking for new space have turned cautious, and want smaller footprints. Bulson points out that the number of new developments and expansions has remained relatively steady over the past three years. Developers finished 13 new developments in 2015 and 14 in 2016, and plan to finish another 11 projects in 2017.
He attributes most of the Chicagoland area's growth to just two specific mass merchandisers: Meijer and
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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.
