Lake Zurich's retail scene is continuing on a positive trend that started in 2011, according to a new village report.
Planning Manager Vijay Gadde has issued the third-quarter report showing a decline in the vacancy levels of the village's retail spaces and increased rental rates. Gadde said what's happening in Lake Zurich may be part of a broader economic recovery.
"Because of the low rental rates, it helped boost the leasing activity," he said Wednesday.
Village board members received the upbeat report this week.
Lake Zurich's retail vacancy rate was 12.65 percent in the first quarter of 2011, Gadde's report shows. When the third quarter ended in September, the vacancy rate continued its decline to 10.21 percent.
Gadde said the retail vacancy rate has dropped for seven consecutive quarters in the village.
Helping to fill the empty space was LA Fitness, which rehabilitated a 42,764-square-foot former Wickes Furniture building and parking lot, Gadde said. An estimated $6.8 million was invested in the full-service fitness operation on Route 12, he added.
Savers, a used-goods store, recently took over 26,000 square feet of previously vacant retail space on Route 12, also known as Rand Road.
"In the post-recession, there's a lot of demand for thrift stores," Gadde said. "Savers is the Walmart of thrift stores."
Lake Zurich's 10.21 percent retail vacancy rate compares to the Chicago area's 11.30 percent, as calculated by the National Association of Realtors, the village report says.
Rent for retail space in Lake Zurich has edged up from $15.31 per square foot at the end of June to a third-quarter average of $15.61. Gadde said retail rent was going for more than $18 per square foot when the recession hit.
Of Lake Zurich's roughly 1.83 million square feet of retail space, 187,221 remain vacant, according to the village report. Gadde said a former Kmart store accounts for 88,000 square feet of the empty space.
Daniel Peterson, Lake Zurich's building and zoning director, said he received a positive vibe about retail activity when he and Gadde attended the International Council of Shopping Centers convention earlier this month in Chicago.
"There's more (retail) activity this year than I've seen in the last four years," Peterson said, "and people are really moving to get onto properties, as they're seeing the trends and rent prices go up and the vacancy rates decrease. I feel we should be seeing some continued positive trends."