What area is your expertise?
Yorkville, Illinois/Kendall County. In March, Kendall County was named the fastest growing county in the nation, according to the U.S. Census, growing 77.5 percent from 2000 to 2007.
What trends do you see presently in retail development in your area?
Because of the unprecedented growth of Kendall County since the late 1990s, there are many national retailers who have found their way to the area, and while there has been a recent slow down in the acquisition of retail land sites in the Chicagoland area, production has not stopped on existing sites. The trend in Yorkville is going to be smaller projects with lesser known tenants over the next three to five years. Aside from the current economic woes and tightened lending restrictions, housing demographics are the key factor of this trend. Housing has slowed from one year ago, but there are signs that it’s picking up again. There have been more sales and builders have begun to create new incentives.
I expect developers to move in toward the larger population centers and seek infill and/or redevelopment projects to combat inflationary land prices and continuing lender issues. The larger population bases and smaller risk projects are going to really take off over the next three to five years. Cities, like Yorkville, will be slightly affected by this trend as their population increases are expected to offset any slowdown of development due to existing projects already approved and on the books. As long as people keep moving to Yorkville, retail development will be sure to follow.
What type of retail product is doing well in your area?
One of the area’s newest commercial centers in Yorkville is Kendall Market Place, which is nearly 800,000 square feet, has recently opened a Kohl’s and Home Depot and a Target Superstore. Menards has been thriving for over two years with no signs of slowing down, and a Super Wal-Mart recently announced plans to open a Yorkville location in 2010. These retailers are doing well in Yorkville, but because of the influx of large retailers, the trend will move into smaller centers and tenants. Retail properties that are competitive with their rates and upkeep are expected to do well.
What retailers are new to your area?
Jewel-Osco, Menards, Kohl’s, The Home Depot and Target
Who are the active retail developers in your area?
Grecco-Reggi, HRM Properties and Harlem-Irving.
Please name one or two significant retail developments in your area. What impact will these projects have on the market?
The recently-opened Kendall Market Place is located on Route 34, approximately two miles west of Route 47 between Yorkville and Plano, Ill. Kendall Market Place is one of the largest retail centers to be developed in Illinois over the last two years at nearly 800,000 square feet. It is being developed by Harlem Irving Companies.
Other recent developments include:
River North at Cannonball Road and Route 47 — 15,000 square feet
Heartland Center at Route 34 and McHugh — 20,000 square feet
Walnut Plaza at Route 47 and Walnut — 22,000 square feet
Cozy Corner at Route 126 and Route 47 — 15,000 square feet
Fountain Village at Route 47 and Route 71 — 27,000 square feet
Also coming to Yorkville are Dick's Sporting Goods, Marshalls, Ulta, Dress Barn, Famous Footwear and Petsmart, just to name a few.
Where is the majority of development taking place? Why is this area doing well?
Most of Yorkville’s growth has taken place on Route 34 and Route 47. As the cross roads to the county, they connect Kendall County to DuPage County, Will County, Cook County and Kane County. Aside from Kendall Market Place and a few other large retailer anchored centers, the majority of new development projects have been smaller, unanchored strip centers.
What area do you expect to be the next big retail development market? Why?
I expect infill and redevelopment projects to be a serious contender throughout the Chicagoland area over the next five years. Taking this route uses existing zoning and structures and lessens a developer’s risk, while combating inflated land prices and entitlement issues.
Please describe the retail leasing activity in your area.
Activity has been steady as an influx of new property has come into the market over the last two years. Recent economic conditions have seen retail rental prices begin to fall between $15.00 and $25.00 per square foot. In the short term, smaller retailers will be the main tenants; however, the ground work is laid for more large national retailers to come to Yorkville and the surrounding areas.
Please give a measure of retail vacancy rates and a measure of available sublease space.
Vacancy loss is currently about 20 percent due to the many new projects that have been developed over the last 12 months. Developers are shaking off the affects of the slower economy by discounting rates and getting more creative with lease terms and build-out options.
What types of retailers should look into your market in the coming year? What type of retail is needed?
Service related retailers should be paying attention to the burgeoning housing growth that has affected Yorkville and the county as a whole. Smaller retailers are needed as well. The workforce in the area is well educated and several of the economic development corporations have set up programs to help retailers bring their business into the area.
Would you like to make any additional observations about the retail market in your area?
As economic conditions are improving in Kendall County, and as new centers are being built in the area, existing sites with reasonable rents will become appealing to smaller start-up tenants that would not have otherwise had an opportunity to compete. This will have a positive effect on the local economy and will keep Yorkville’s spaces filled for years to come.
Submitted by Rich Artman, vice president/managing broker with the Yorkville, Illinois office of Inland Real Estate Sales, Inc. Posted Online 05-14-08.
Rich Artman