3 national retail real estate trends playing out locally

Earlier this summer, the Englewood Construction team headed to Las Vegas for ICSC RECon - the global retail real estate convention hosted annually by the International Council of Shopping Centers. As a national commercial contractor that specializes in retail construction projects across the country, as well as in Chicagoland where we are headquartered, our firm always finds this event to be a valuable opportunity to take the temperature of the retail sector.

Here are our three top take-aways from this year's RECon that represent retail trends we're already experiencing in our work with clients locally as well as in markets outside the Chicago area:

1. Municipalities playing matchmaker

Each year, more and more municipality representatives attend RECon in an effort to network and promote their communities for retail development. This year, we had the opportunity to meet with several representatives from Chicago-area suburbs who attended the conference as an opportunity to work on deals that could potentially lead to retail growth in their towns.

This just goes to show that municipalities today are becoming sophisticated members of the commercial real estate arena. As more see the tangible payoffs that come from marketing their community and its private sector commercial properties - from creating revenue and jobs to attracting businesses and services that benefit residents - we're likely to see an even greater number of municipalities become proactive in pursuing development opportunities and participating in events like RECon.

2. Developers dropping anchor

The shuttering of major brands - and the anchor retail space they subsequently leave behind at shopping centers - continues to be one of the primary challenges in the retail sector. Locally, we see this at a number of retail centers and malls where well-known stores such as Carson Pirie Scott, Toys R Us and Sears have closed, creating swathes of vacant retail space.

At this year's RECon, we continued to hear plenty of discussion about different strategies to fill that space, including everything from bringing in nontraditional tenants to simply tearing down empty anchor stores to make way for unique concepts and amenities that would enhance the mall environment and drive traffic. We're seeing this locally, too, as we bid on projects that would convert empty anchors stores into unique family-entertainment-based concepts. It's an interesting time for retail, with many insiders saying nothing is off the table when it comes to filling or repurposing a space. And while most developers do acknowledge this is the main challenge for the industry right now, they also see it as a positive opportunity to think creatively and find outside-the-box solutions that will transform the retail experience.

3. Smaller centers winning big

As we looked around the convention floor at this year's RECon, there was a noticeable shift among the key players. Some of the big owners and developers who primarily work with major malls had a much more subdued presence than in the past. On the other hand, we saw bigger booths and a stronger showing from some of the small- to mid-sized developers.

One reason for this is likely that these smaller retail developers specialize in a niche where there's still a lot of demand and activity - namely, four- or five-unit strip centers. They pick up these centers because they are so well-placed; even if the anchor stores remain vacant, the locations are so desirable that the owners/developers still get a lot of traction filling high-visibility outparcel lots and single-use tenant spaces. That's certainly the case here in Chicago's suburbs, where we see many of the retail brands we work with, as well as a number of restaurant clients, specifically choosing smaller centers over larger malls due to their preferred locations and stronger traffic. The retail landscape continues to evolve across the country, and many of the trends we see nationally are playing out on a local level as well. As retailers, real estate owners, developers and other players adjust to these changes and think creatively about the challenges facing this sector, there are sure to be exciting new opportunities ahead.

• Chuck Taylor is director of operations for Lemont-based Englewood Construction, a national commercial construction firm specializing in retail, restaurant, hospitality/entertainment, industrial, office, entertainment and senior living construction as well as facilities management and maintenance.