Chicago’s retail sector hasn’t had quite experienced the boom like other development types — quite the opposite actually.
Last year saw developers build a record low amount of new retail space in the Chicago market, with only 870,000 square feet built in 2018, according to Mid-America Real Estate. This year is expected to see even less new development, with only 600,000 square feet of new retail space projected to come online.
Despite the slowdown, a number of local general contractors have been plenty busy in the field.
Chicago’s top five retail contractors built over 357,000 square feet of new commercial development from May 2018 to June 2019. Just over 40 percent of that was built by one of the longest-standing contractor firms in the city: W.E. O’Neil.
Chicago-based O’Neil was founded in 1925 but is now a national player with offices in Los Angeles, San Diego, Nashville, Phoenix and Tucson, as well as its headquarters in the West Loop. The firm place No. 16 in The Real Deal’s ranking of Chicago’s most active construction firms.
The firm handled 146,489 square feet in retail construction between May 2018 and June 2019, the most recent yearly snapshot of the most active contractors in the city.
That accounted for all of O’Neil’s new development work in that time period, but the developer has been busy in recent years.
The firm is the general contractor on the nearly completed Lincoln Common, McCaffery and Hines’s massive redevelopment of the former Children’s Memorial Hospital in Lincoln Park. The project includes a seven-story condo building, two apartment towers, a senior living facility and more than 100,000 square feet of commercial space, of which Equinox gym will be a tenant.
W.E. O’Neil also partnered with McCaffery for the developer’s 150,000-square foot Fulton Market office complex at 1201 West Lake Street, which is the developer’s new headquarters and home to Coca Cola’s local offices.
It’s common for major developers to return to some of the city’s biggest contractors, as is the case with O’Neil and McCaffery. Familiarity breeds confidence, although compatibility is also a major factor in choosing contractors, developers have told The Real Deal.
O’Neil did not respond to multiple requests to comment for The Real Deal’s ranking of general contractors.
Another Chicago firm, Focus Development, came in second in retail contracting, producing nearly 98,000 square feet over the last year. That business amounts to only 8.5 percent of Focus’ overall activity in that span, with the firm handling 1.1 million square feet of development, including the 220-unit Logan Apartments, which it began building for Fifield this year.
Focus came in third in TRD’s overall ranking of top contractors.
Like O’Neil, Focus has a diverse range of project specialities.
Before the last recession, the Chicago-based firm only oversaw construction for its own properties, according to Tim Anderson, Focus’ CEO. (The firm used to be known as Focus Development.)
Bidding for independent contracts “diversifies our business model and lowers our risk profile while allowing us to grow the organization,” Anderson said.
“We’ve tried to find our niche, and it’s diversity,” he added. “We can do the suburban three-story wood project, or we can do 30-story high-rise in Chicago. We’re not going to do a 100-story high rise, but if you have an 18-story high-rise building with 40,000-square-foot floor plates, we’re going to be able to find what works best for the client.”