‘Mid box’ retailers having hard time finding spots in Chicago
BY DAVID ROEDER email@example.com September 18, 2012 6:26PM
A mid-size Wal-Mart near Presidential Towers.
Updated: October 20, 2012 6:22AM
‘Big box” is a common term in the retail industry, used for years. But have you heard of “mid box” retailers? You and I might think of it as plus-sized stores going on a diet.
Retailers that used to be defined by aisles that stretched to the horizon are learning the secrets of downsizing. They have found that smaller stores can be an efficient way to get closer to more people. But a report by Mid-America Real Estate Corp. concludes that Chicago needs more places to put them.
The city just isn’t set up very well for mid boxes, defined in this case as stores from 15,000 square feet to 50,000 square feet, said Dan Tausk, a Mid-America principal who wrote the report. Think of Wal-Mart’s “neighborhood market” concept, or a Marshalls, Ross Dress for Less, electronics merchant hhgregg and some grocery chains such as Aldi.
Tausk said dense, high-income submarkets in the city and close-in suburbs such as Lincoln Square, River Forest and Bucktown have almost no space in the mid-box range. The North Side lakefront has a share of space that’s far behind its proportion of the population.
Only the central city, which in Mid-America’s report includes downtown and Lincoln Park, is doing well, with 34 percent of the mid-box space for only 8.6 percent of the population, Tausk said.
Tightly packed city neighborhoods, with multiple parcels under various owners, present a challenge to retail developers. Tausk said retailers have to get more creative with multifloor formats and designing floor space above parking. He also said the city has to take a difficult step and rezone industrial property that’s obsolete.
The South Side could benefit from a push for mid-box retail, he said. “The buying power and density are fantastic, but a lot of dollars bleed out of the South Side neighborhoods,” Tausk said.
TUNEUP: Aries Capital is still trying to find a buyer or a partner to develop the landmark Chicago Motor Club building at 68 E. Wacker Pl., but plans have changed. Aries originally wanted to package a deal with the building and a vacant 4,700-square-foot parcel next door, which it also owned.
However, Aries Vice President Andrew Wilson said that proved too complex and hard to finance. So it has sold the vacant lot to a private hotel real estate company for $5 million. Records show the buyer is affiliated with Magna Hospitality Group of Warwick, R.I.
The 15-story former motor club headquarters, with an Art Deco lobby, could still be redeveloped on its own. Wilson said selling the vacant lot does not represent a setback. “Selling off the lot is great progress. I feel that the building renovation is more plausible, more straightforward,” he said.
However, the skinny floors of the Holabird & Root-designed building have limited its appeal for offices and a residential plan already has failed there.
BRANCHING OUT: Cedar Street Co., profiled in this column last month for its attempt to provide apartment units under a brand, Flats Chicago, has added to its holdings. Most of its properties are in Edgewater and Uptown, but it has added a building in Rogers Park, at 7722 N. Ashland.
It bought the 25-unit building for $900,000 and plans to fix it up with free wi-fi and washers and dryers in all units. The company is trying to develop a brand by renovating distressed buildings and offering them at what it calls “approachable rents.”
RAISING THE ROOF: Thursday marks the official opening of the Bradley Business Center at 2500 W. Bradley Place, across the street from the Channel 9 studios, on the Northwest Side. Centrum Partners and Hansen Realty developed Bradley Business Center as a location for high-tech companies.
Among its first leases was to BrightFarms, which leased about an acre on the building’s roof for a hydroponic greenhouse farm. The two-story building is vast, offering 350,000 square feet.
DOING THE DEALS: An affiliate of Cole Real Estate Investments bought a four-story office building at 577 Aptakisic Road, Lincolnshire, for $49.7 million. The 162,000-square-foot building is fully leased to lab equipment maker Sysmex Corp. Holliday Fenoglio Fowler LP represented the property for sellers Bridge Development Partners LLC and Globe Corp. . . . Chicago-based Harrison Street Real Estate Capital said it has become the third largest owner of student housing in the United States with purchases or developments this year worth more than $400 million. Its investments are mostly around major state universities, including the University of Illinois. . . . Nufarm Americas Inc. hired Principle Construction Corp. to renovate its new 26,000 square feet of office space at 11901 S. Austin, Alsip.
David Roeder reports on real estate at 6:22 p.m. Thursdays on WBBM-AM (780) and WBBM-FM (105.9). The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday.