Bye-bye Big Box; Hello Mid-Box
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|Three new shopping centers are coming online in three different urban neighborhoods: Pulaski Promenade in Archer Heights, Pullman Park in Pullman, and Evergreen Marketplace at 91 Street and Western Avenue. What they have in common: plenty of space for the newly popular mid-sized retail store, says Mid-America Real Estate principal Dan Tausk. (Though none are interested in our forever-doomed magic shop.) He released a report on the “mid-box” phenomenon recently that shows a dearth of 15k SF to 50k SF retail spaces in the metro area, especially downtown. The reasons: land is scarce and space is costly in densely populated, high-income neighborhoods like Lincoln Park, Streeterville, West Loop, and Bucktown.|
With retailers like Ross Dress for Less, h.h.gregg, Marshall’s, and Walmart Market pursuing mid-box expansion space opportunities throughout Chicagoland, Dan expects to see more new development. In this size category, once called junior box, Dan says there’s 7% vacancy and strong absorption. If demand for space continues to grow, retailers will be pressed to adopt alternative solutions as well like more multi-level stores, lower levels, and vertical parking structures tucked into tight parcels. Obsolete big boxes will continue to be redeveloped despite the construction issues that arise when trying to divide space designed with infrastructure and MEP systems for a single tenant. Dan says that's manageable and splitting often commands better rents to offset the costs.