Retail Construction Set to Rise in 2015

Englewood is renovating this Yard House Restaurant in Kansas City.

CHICAGOThe nationwide increase in job creation, coupled with the Feds recent decision to continue holding down interest rates, has many in commercial real estate looking toward 2015 with great anticipation. This includes those involved in retail and restaurant ground-up construction and shopping mall renovations.

Confident in the improving economy, national retailers and restaurant owners have been adding new locations this year, and we expect that activity to continue in 2015, says William Di Santo, president of Lemont, IL-based Englewood Construction. Shopping mall owners are also renovating their space to make trips to the mall more experiential.

In 2014, many retailers and restaurateurs added new venues as well as tore down existing stores and replaced them with new ones in order to meet brand standards, Di Santo adds. While there still is ample space for retrofits in empty storefronts, were seeing more focus on ground-up construction.

Englewood recently started three new ground-up projects, a Coopers Hawk Winery and Restaurant in Oak Lawn, IL, a suburb of Chicago, a Seasons 52 restaurant from Darden in Bridgewater, NJ, and a 55,000-square-foot Hobby Lobby at Seabrook Crossings in Seabrook, NH. In 2014, Englewood also completed a ground-up Goodwill store in the Chicago area.

Over the past few years, the majority of restaurant construction has been confined to upscale activity, Di Santo says. That has changed in recent months as consumers are returning in all categories, including fine dining, fast casual and fast food. As a result, we expect a very robust pipeline for restaurant work in 2015.

Englewood also recently began an expansion at white tablecloth restaurant The Purple Pig in Chicago, as well as the renovation of a Yard House in Kansas Citys Power and Light District. Englewood is also working with Red Robin and Buffalo Wild Wings in the fast casual arena to roll out several new restaurants in 2015.

Stratford Square Mall in suburban Bloomingdale, IL, has been a popular retail destination in its market for decades, but its owners recently tapped Englewood to manage the malls redesign, construction and tenant coordination, a good example of the recent trend to revitalize and revamp existing malls. The traditional mall has faced an uphill battle as competition from lifestyle centers and online shopping has only increased in recent years, says Di Santo. To draw shoppers to malls, investors will be adding entertainment venues, fine dining and other features that cannot be recreated online.

People are willing to go out and spend money on services they cannot get at home, he adds. Entertainment options, such as new theater and bowling concepts, are both trending for 2015.

And increased confidence among consumers has resulted in more foot traffic in malls, leading retail tenants to relocate from tucked-away corners to more expensive center-court locations. To offset the higher rent, many national retailers have decided to take smaller floor plates. And for shopping mall owners, this has meant reconfiguring areas with renovation projects.

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Retail Construction Set to Rise in 2015