Shopping center construction in Chicago area to hit all-time low: report
Less than 1M sf of shopping center space will be built, down from peak of 8.4M
Construction of shopping center space will hit an all-time low in 2018 as rising e-commerce sales and other factors continue to batter the retail sector, according to a report from Mid-America Real Estate.
Some 993,000 square feet of shopping center space is expected to come to market, down 4.8 percent from last year and well below the 8.4 million square feet at the market’s peak in 2007, according the study, first reported by Crain’s.
“Unfortunately, it just seems like where we’re at is where we’re going to be for a while,” said Andy Bulson, author of the report for Mid-America, an Oak Brook-based retail brokerage. “There’s an Amazon package on my doorstep on a daily basis.”
The Chicago area is being hit harder than other areas of the country, Bulson said, and e-commerce is just one of the factors.
“The market’s pretty overbuilt, and there’s negative population growth — and Cook County taxes: There are a lot of things working against us,” he added.
Retail landlords have pursued different strategies for weathering the storm, including dividing up vacant big-box stores into smaller spaces for new tenants, bringing in hotels and apartments to diversify properties, and targeting fitness centers and entertainment tenants that aren’t as susceptible to e-commerce pressures. [Crain’s] — John O’Brien