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NEWS RELEASE

Mid-America Report Points to 3rd Year of Decline for New Shopping Center Construction in Chicagoland

As retail vacancies fill, construction will bottom out in 2011

OAKBROOK TERRACE, Ill. (Jan. 11, 2011) – While Chicago-based Mid-America Real Estate Corporation saw increased investment sales of Chicagoland shopping centers and a steady flow of leasing activity in the latter half of 2010, the development of new shopping centers throughout 2010 decreased for a third consecutive year. According to Andy Bulson, author of the Mid-America 2010-11 Shopping Center Report released this month, new shopping center development in 2010 dropped to 1.18 million square feet, down 31% from 2009’s 1.7 million square feet, which itself saw a decline of 53% from 2008’s 3.7 million square feet.

The year 2010 also represents the lowest level of new shopping center development since 1983 when the report began. He says that the decline is due in large part to the drop in demand by retailers on the sideline and the abundance of retail vacancies left behind during the recession, which are currently being absorbed by second-generation users.

“We expect that new shopping center construction will bottom out even further in 2011, totaling about 634,000 square feet,” he says, “But we do expect a moderate increase in 2012.”  He adds that most of the projects now being worked on for delivery after 2011 are located in the city or in nearby densely populated collar communities. “Currently, with the usual exception of Wal-Mart, there are nearly no new shopping center projects planned for development in suburban Chicago for 2011,” Mr. Bulson says.

THE PLAYERS IN 2010 -2012
According to Mr. Bulson, nearly half of the total shopping center development in 2010 came from Costco, with three new centers in metro Chicago.  However, Roundy’s “Marianos’ Fresh Market” is the named anchor in more than six urban projects, some of which are likely to see delivery in 2012 or 2013. “Wal-Mart could still make a large impact in the City of Chicago,” Mr. Bulson says. “With their various sizes and formats, they could increase the figures we’re projecting for 2012 deliveries.”

WHAT NEEDS TO HAPPEN FOR RECOVERY
Returning to a viable rate of new shopping center development for Chicagoland  -- around 3 to 4 million square feet per year – would only be supported when at least two factors are met, says Mr. Bulson. “Of course, with an abundance of available vacancies left by the recession and limited demand from national retailers, these would need to be absorbed first before we see any significant new shopping center development. And even then, lending would need to return to the commercial real estate sector in some robust manner.

Mid-America Real Estate Corporation is a member of Mid-America Real Estate Group and a ChainLinks affiliate. Mid-America Real Estate Group is a full-service retail real estate organization that has become the Midwest’s leader in retail investment sales. For more information, call (630) 954-7300 or visit www.midamericagrp.com.

WEB LINKS for further research on Mid-America Real Estate Corp.
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PRESS CONTACTS representing Mid-America Real Estate Corp.

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