Chicago sees increase in anchor tenant transactions last year
Chicago A report released Monday by CB Richard Ellis found that 48 retail anchor transactions have been completed in Chicago during the past year, and the overwhelming majority occurred within the past four months.
The report, “Retail Anchor Report- Spring 2010,” also found that the combination of lower rents and influx of new tenants looking to lock in historically low rates have led to a recent surge in retail anchor leasing.
“Our survey shows that the current activity for retail anchor space is being driven by the fantastic deals offered,” said Joe Parrott, SCLS, senior VP, CB Richard Ellis. “There is concern that many of these active tenants may slow or stop their expansion once the supply of A locations at rock bottom rents is gone.”
According to the survey, average asking rents have decreased by 19%, currently standing at $10.12 per square foot. The average rate for completed anchor transactions ranged from 30% to 70% below the previous tenant’s rent. The average net rent of completed anchor leases was $6.52 per square foot overall and $5.67 per square foot for suburban Chicago properties.
Other findings in the report include: The total number of retail anchor spaces over 20,000 sq. ft. on the market currently stands at 207, down from 227 last year but still significantly above the 102 reported in 2004 during the last anchor crisis.
Eighty-five percent of currently available anchor spaces have been on the market for over a year, and 28 of the 36 Circuit City spaces that came on the market between late 2008 and early 2009 are still on the market today. Only 27 new anchor spaces came on the market in Chicagoland during the past year, as compared with 97 the prior year.
New-to-market Chicago retailers included Savers, Gordmans, Ross Dress for Less, SuitHouse, Forman Mills, Garden Ridge, FAMSA, Shoppers World and Wonder!.