SWOT Analysis
•
•
•
•
Strengths
– Solid Demographics
– High Traffic counts (Auto Access)
– Community incentives for development
– Parcels sized for all types of development
– A mix of rental rates including some affordable spaces
– Transit access
– New anchor tenants
– Community support for commercial development
– Stable property prices that lowered impact of recession
– Government land ownership
– Improvement of key arterials to accommodate new industrial development including
connection of I-57 & I 294
Weaknesses
– Higher cost to develop grayfields than green fields
– Weak co-tenancies at aging centers
– Comparatively high Cook County taxes
– IDOT road ownership
– Poor pedestrian and bicycle connection to shopping centers
– Owners satisfied with existing conditions and uninterested in investing for new tenants
– Attempts to recover sunk costs
Opportunities
– Recovering economy bringing new business expansion
– New uses emerging for vacant big box
– Changing national racial perceptions (the “post racial” economy)
– Multi channel retail brings more sales to a location
– New communication tools like groupon, facebook and twitter
– Private equity and grant funding are being strongly considered for investment in the
region
Threats
– National overstored conditions
– Wrong perception based on racial character
– Changing Shopping Center configurations
– Shrinkage of capital
– Coming bank foreclosure
Recruitment Platform
•
A new study area retail business benefits from:
– Over 271,000 customers within a 15-minute drive spending $2.3 billion on retail
purchases
– Communities where household incomes exceed Chicago market medians by as much as
72%
– Exposure to high average daily traffic
• 88,700 on I-57
• 37,700 on Lincoln Highway
• 22,600 on Western Avenue
– Government support for development
• Incentive programs supporting modernization and redevelopment of retail
property
• Land ownership
• Expanding cross regional access with coming connection of I-57 and I-294
– Co-tenancy with newly built anchors
• J C Penney (2007)
• Target (2007)
Illinois Department of Revenue Sales Tax Categories
Group 01 ‐‐ General Merchandise
Group 06 ‐‐ Lumber, Building, and Hardware
5311 Department stores
5331 Variety stores
5399 Miscellaneous general merchandise stores
1521
1522
1531
1541
1542
1611
1622
1623
1629
1711
1721
1731
1741
1742
1743
1751
1752
1761
1771
1781
1791
1793
1794
1795
1796
1799
5211
5231
5251
5261
5271
Group 02 ‐‐ Food
5411
5421
5431
5441
5451
5461
5499
Grocery stores
Meat and fish markets
Fruit and vegetable markets
Candy, nut, and confectionery stores
Dairy products stores
Retail bakeries
Miscellaneous food stores
Group 03 ‐‐ Drinking and Eating Places
5812 Eating places
5813 Drinking places
7011 Hotels and motels
Group 04 ‐‐ Apparel
5611
5621
5632
5641
5651
5661
5699
Men's and boys' clothing stores
Women's clothing stores
Women's accessory and specialty stores
Children's and infants' wear stores
Family clothing stores
Shoe stores
Miscellaneous apparel and accessory stores
Group 05 ‐‐ Furniture, Household, and Radio
5712
5713
5714
5719
5722
5731
5734
5735
5736
7622
7623
7629
7631
7641
7692
7694
7699
Single‐family housing construction
Residential construction, NEC
Operative builders
Industrial buildings and warehouses
Nonresidential construction, NEC
Highway and street construction
Bridge, tunnel, and elevated highway
Water, sewer, and utility lines
Heavy construction, NEC
Plumbing, heating, air‐conditioning
Painting and paper hanging
Electrical work
Masonry and other stonework
Plastering, drywall, and insulation
Terrazzo, tile, marble and mossaic
Carpentry work
Floor laying and floor work, NEC
Roofing, siding, and sheetmetal work
Concrete work
Water well drilling
Structural steel erection
Glass and glazing work
Excavation work
Wrecking and demolition work
Installing building equipment
Special trade contractors, NEC
Lumber and other building materials
Paint, glass, and wallpaper stores
Hardware stores
Retail nurseries and garden stores
Mobile home dealers
Furniture stores
Floor covering stores
Drapery and upholstery stores
Miscellaneous homefurnishings
Household appliance stores
Radio, television, and electronic stores
Computer and software stores
Record and prerecorded tape stores
Musical instrument stores
Radio and television repair
Refrigeration service and repair
Electrical repair shops
Watch, clock, and jewelry repair
Reupholstery and furniture repair
Welding repair
Armature rewinding shops
Repair services, NEC
1/3/2011
1
Illinois Department of Revenue Sales Tax Categories
Group 07 ‐‐ Automotive and Filling Stations
5511
5521
5531
5541
5551
5561
5571
5599
7513
7514
7515
7519
7521
7532
7533
7534
7536
7537
7538
7539
7542
7549
New and used car dealers
Used car dealers
Auto and home supply stores
Gasoline service stations
Boat dealers
Recreational vehicle dealers
Motorcycle dealers
Automotive dealers, NEC
Truck rental and leasing, no drivers
Passenger car rental
Passenger car leasing
Utility trailer rental
Automobile parking
Top and body repair and paint shops
Auto exhaust system repair shops
Tire retreading and repair shops
Automotive glass replacement shops
Automotive transmission repair shops
General automotive repair shops
Automotive repair shops, NEC
Carwashes
Automotive services, NEC
Group 08 ‐‐ Drugs and Miscellaneous Retail
5912
5921
5932
5941
5942
5943
5944
5945
5946
5947
5948
5949
5961
5962
5963
5983
5984
5989
5992
5993
5994
5995
5999
9999
Drug stores and proprietary stores
Liquor stores
Used merchandise stores
Sporting goods and bicycle shops
Book stores
Stationery stores
Jewelry stores
Hobby, toy, and game shops
Camera and photographic supply stores
Gift, novelty, and souvenir shop
Luggage and leather goods stores
Sewing, needlework, and piece goods
Catalog and mail‐order houses
Merchandising machine operators
Direct selling establishments
Fuel oil dealers
Liquefied petroleum gas dealers
Fuel dealers, NEC
Florists
Tobacco stores and stands
News dealers and newsstands
Optical goods stores
Miscellaneous retail stores, NEC
Nonclassifiable establishments
1/3/2011
2
Print Story
Page 1 of 2
Print Story
Printed from ChicagoRealEstateDaily.com
Retail building to hit low, then recover
By: Eddie Baeb January 10, 2011
(Crain’s) — Shopping center development will be at a historic low this year but snap back in 2012 to the highest
level in several years.
Only three new centers are slated to open this year, along with one major expansion, tallying a total of just
634,000 square feet of new shopping-center space in the Chicago area, according to an annual report by retail
real estate brokerage Mid-America Real Estate Corp.
That’s a 46% fall from the amount of new retail space in 2010 and the first time annual development will total
less than 1 million square feet since at least 1983, when Mid-America began tracking the data.
“The shopping center business is a big business, and it just stopped,” says Andy Bulson, a senior vice-president
with Oakbrook Terrace-based Mid-America. “It’s a pretty amazing situation.”
The picture is expected to brighten in 2012, when Mid-America expects development of 2.67 million square feet.
That would be the highest since 3.7 million square feet of new retail space opened in 2008.
Mr. Bulson says much of the development on the books is going to be driven by smaller, grocery-anchored
centers in urban locations rather than the mainstay of retail development during the 2000s: suburban
supercenters like Target and Wal-Mart and home-improvement chains like Home Depot, Menard’s and Lowe’s.
Given the dire state of the housing market and the expectations of a slow economic recovery, Mr. Bulson
figures development won’t approach the 2007 peak of 8.4 million square for many years.
“It’s going to come back to a new normal,” he says.
Local development activity last year was led by Issaquah, Wash.-based warehouse retailer Costco Wholesale
Corp. along with Wal-Mart Stores Inc. Bentonville, Ark.-based Wal-Mart, the world’s biggest retailer, also is
anchoring one of the three shopping centers to open this year and is scouring the city for locations it could open
next year.
Mid-America predicts 15 new shopping centers will come online in 2012. Nine of those will be anchored by
grocery stores such as Mariano’s Fresh Market, the new concept from Milwaukee-based Roundy’s, along with
Whole Foods and Kroger Co.’s discount chain Food 4 Less.
One reason for the optimism is that Mr. Bulson and others say the vacant spaces created when many chains
shut their doors during the recession are gradually getting filled, and that developers are resurfacing. The local
retail vacancy rate fell in the second and third quarters last year after peaking at 12.1% in the first quarter,
http://www.chicagorealestatedaily.com/article/20110110/CRED02/110119993?template=p... 1/10/2011
Print Story
Page 2 of 2
according to CB Richard Ellis Inc.
“There’s going to be demand for new development again,” says Andrew Koglin, president of OKW Architects,
which specializes in designing shopping centers. “The tide has been rising in planning for retail.”
Grocers and other retailers are getting more creative in their quest for so-called in-fill sites, locations in urban
settings and areas of dense population. One such example was Aldi Inc.’s recent lease for 17,000 square feet
in the Chicago Ridge mall.
Michael Mallon of Wheaton-based Mallon & Associates Ltd. represented Aldi and says he expects more grocers
and discount chains to consider similar deals in coming years.
“There’s not going to be a lot of greenfield growth,” Mr. Mallon says. “Most of what we’re going to see in the
next several years is redevelopment of existing shopping centers.”
The three new projects to open this year are:
A 200,000-square-foot redevelopment of the Randhurst Village at Rand and Elmhurst roads in Mt. Prospect,
anchored by T.J. Maxx and Sports Authority stores.
A 176,400-square-foot Wal-Mart Supercenter is slated to open late this year in Elgin at Randall and Bowes
roads.
A 68,000-square-foot Sunset Foods in northwest suburban Long Grove at State Route 83 and Aptakisic Road.
http://www.chicagorealestatedaily.com/article/20110110/CRED02/110119993?template=p... 1/10/2011