Currently, the most desirable retail property type in the Chicago metropolitan area is the grocery-anchored strip shopping center. Michigan-based Meijer entered the market this year with at least five stores planned for Chicagoland. Dominant grocer Jewel plans 10 more stores. In second place is Safeway-owned Dominick's which plans five more stores. Marcus & Millichap predicts that grocery-anchored strip centers will sell for $100-$160 per sf, community anchored strip centers for $90-$150, power centers for $80-$120 and unanchored strip centers for $80 per sf to $130 per sf.
The Chicagoland area will also experience high competition from drug retailers. CVS entered the market this year and plans to expand to about 100 new stores over the next several years. Deerfield, IL-based Walgreen's plans to meet the challenge by opening 25-40 more locations per year in the market over the next few year. Rite-Aid is expected to enter the market in 2001 as well.
In terms of Chicago's CBD, Northern Realty Group Ltd.'s annual survey of retail in Downtown's State Street/Wabash Avenue corridor reports that the vacancy rate dropped to 4.3%. Average asking rent is $51.76 per sf. Critical to the future growth of this area is the long-awaited development of "Block 37," located directly across Marshall Field's flagship store on State Street.
Another factor in the rise of retail in the Chicago metropolitan area is the trend of suburbs to either revive or totally create new downtown areas. Many of these new developments are mixed-use so both office workers and residential occupants are a captive audience for retailers. The strong economy, more disposable income and higher levels of personal debt have contributed to the growth of the national retail market. With the demise of retailers like Ward's and Bradlees, and predictions of a downturn in the national economy, only time will tell if retail growth will continue at the pace it's enjoyed in the past decade.
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