"Financing difficulties and lagging retail demand have plagued most of the projects," says SVP Andy Bulson. For example, in 2009 the delivery of gross leasable area totaled 1.7 million square feet. This was a 53% decline from 2008, when GLA totaled 3.7 million square feet.

The number is even more drastic when compared to the 8.4 million square feet that came to the market in 2007. Chicagoland experienced a 79% decline over the last two years. According to Bulson, this is the steepest drop in new development since the report began in 1983, and the lowest GLA since 1984.

Part of this decline is due to retailers expanding current holdings or leasing vacant big boxes rather than build new. "We are also seeing a lack of new big box retail concepts entering the market," Bulson says.

For example, during 2009 Walmart and Menard's each opened two stores, while Target, Lowes and Costco opened only one new facility.

While big box retailers are moving along conservatively, power center projects are at a standstill. The Hillside Town Center was the only multiple-anchor power center to open in 2009.

The Mid-America report predicts 2010 will see more of the same. There are only 1.7 million square feet of new GLA slated to enter the market this year; none of this development includes power centers.

"We hope to see this downturn bottom out in 2010 and pick up marginally in 2011," Bulson says. "But that would require that unemployment does not worsen, the housing market continues to stabilize, consumer spending increases, existing vacancy be absorbed, and lending return to the commercial real estate sector."

For retailers looking to expand, the timing is ideal. "This is a really historic time for successful retailers to secure prime locations in high priority markets," Bulson says. "If you've got a good concept or you're a rent-sensitive national retailer, it's a good time to take advantage of the lower rents in the prime locations."

Some traditional big box retailers are rethinking their traditional store layouts to work in existing but vacant spaces. Bulson says big box retailers are eying the smaller urban markets they could not previously locate in.

For example, as GlobeSt.com reported in January, Target is said to be considering a State Street location. The company could open its first CBD location on two floors in the former Carson Pirie Scott & Co. facility at 1 S. State St.