2 Chicagoland Projects Underline The Endurance Of Retail

Every time experts have predicted the total demise of brick-and-mortar stores, physical retail has dodged, adapted and, above all, endured.

The staying power of physical retail is on display at two Chicagoland shopping centers under development by Kensington Development Partners with construction management by International Contractors Inc., better known as ICI.

“We have collaborated with ICI on these and several other projects,” Kensington principal John Schoditsch said. “They are an honest and hardworking team and have strongly executed for Kensington.”

The developer and contractor both have deep faith in the future of these retail locations and are bringing their expertise to help them thrive. 

“Both developments are highly desirable locations because of their surrounding demographics, high volume intersections and strong tenant mix,” Schoditsch said. “We’ve been fortunate to partner with two municipalities that had a strong desire to revitalize both intersections.”

Tim Jackson, vice president of operations at ICI and a 30-year veteran of the retail construction industry, finds it “immensely promising” to once again see large retail land development opportunities in the marketplace.

ICI is first scheduled to deliver Market Centre in the town of Westmont, 20 miles west of Chicago. ICI Senior Project Manager Todd Scharbert said that before Kensington and ICI arrived, the lot in Westmont was an underdeveloped strip. A few of its stores were closed, even though the area had become more densely populated and other retail establishments nearby were thriving. ICI worked alongside Kensington for a period of 10 months leading up to the acquisition to develop multiple cost models and construction schedules.

The newly imagined 12-acre site is set to feature 112K SF of retail. Kensington and its leasing brokers are still in negotiations for three building lots that will accommodate four businesses, but three tenants have already been secured for the development. One is Starbucks, another is fried chicken restaurant Raising Cane’s.

The final anchor tenant will be LA Fitness. As the fitness industry has taken off, gyms have become a staple for retail centers. 

“All across the Midwest, every time there’s a vacant box location, landlords can line up a fitness tenant and the customers come out of the woodwork,” said Mid-America Real Estate Group principal Willie Hoag, who represented many of the tenants coming to Market Centre. “Whether it's a boutique studio like Orangetheory, or one of the big chains like LA Fitness or Planet Fitness, gyms are driving the traffic in.”  

Especially for “everyday needs”-oriented retail centers like Market Centre, gym users will stop by other retailers to pick up a snack, groceries, household items or even clothing and gifts as part of a routine, Hoag said.

The second, larger project ICI will be delivering is known as Sawmill Station, located in the northern suburb of Morton Grove. Kensington is developing the property in partnership with UK-based IM Properties. The plan calls for 310K SF of retail space spread across the 26-acre site. Along with LA Fitness and Raising Cane’s, Kensington is in negotiations for leases with Kohl's, Cooper's Hawk, Dollar Tree, Starbucks and Aspen Dental. 

Most of the tenants that will make up Sawmill Station are those that provide services and experiences rather than goods — restaurants, gyms, cafés. But Hoag said even the retailers that sell goods have thrived despite the rise in e-commerce, for various reasons.  

“Kohl's is on fire,” he said. “Kohl's especially has thought about how to integrate online into the brick-and-mortar experience.” 

Rounding out both centers are medical providers, which Hoag said are now pushing to be closer than ever to consumers. 

Perhaps the most innovative piece of the Sawmill Station project, however, is 240 residential units planned for the eastern edge of the site, along the Frank Bobrytzke Forest preserve and within walking distance of the Morton Grove Metra Station.  

“We do think the future of retail is going to have to be mixed-use, which puts Sawmill on the cutting edge of development,” Scharbert said, adding that the apartments and retail at Sawmill are a step in the right direction to densify development around the commuter rail line.

For projects that have so much land and so many moving parts, creating accurate budgets was complex, but crucial. Fortunately, ICI employs two of the 26 estimators in Illinois who are certified by the American Society of Professional Estimators. ICI’s comprehensive pre-construction process ultimately allowed Kensington to refine its conceptual goals for the two retail centers.

“These budget numbers are critical,” Scharbert said. “Having accurate budgets is in large part how we’ve been able to develop such a strong relationship with Kensington. ICI’s pre-construction program is a comprehensive process that ultimately allows developers to make well-informed decisions during their deal-making.”

Hoag said the reason he believes retail will thrive in both the Westmont and Morton Grove locations comes back to retail fundamentals in the end. 

“These are four-way intersections with urban or near-urban densities, with a lot of young families and singles in the 3-mile radius,” Hoag said. “This isn't 'if you build it, they will come.' They're already here.”

This feature was produced by Bisnow Branded Content in collaboration with ICI. Bisnow news staff was not involved in the production of this content.