The retail the lowest amount of new space in at least 27 years.business has—for all intents and purposes—been dead for much of the past two years. In fact, in 2009 the industry delivered
But at the 2010 ICSC RECon show some firms were talking about dusting off the cranes and putting projects back in thepipeline.
To be sure, firms are being extremely cautious when discussing development. Some of the projects being talked about wouldn’t break ground for another year and would be scheduled to open in 2013 and 2014. Yet the talk of development is another sign that fortunes for the retail real estate industry continue to improve.
Any rise in development would be welcomefor architecture firms that specialize in retail real estate. Roy Higgs, senior partner and CEO of Baltimore-based Development Design Group, said his firm has kept busy in recent years primarily through its international work. What used to comprise a minority of his firm’s work has accounted for the lion’s share of its revenue the last couple of years. In addition, the firm has had success through its DDG-Graphics business and in designing LEED-certified projects. In all, it has 12 LEED projects in the works, half of which are overseas.
But Higgs said that he has seen an uptick in developer inquiries. “We’re on the leading edge,” Higgs said. “When we get inquiries it is about 12 months ahead of when a project may get into engineering and really move ahead. We’re seeing some serious shaking of the bushes—and it’s not for small projects.”
Chestnut Hill-based W/S Development is working on a couple of projects that will break ground next spring and be built in phases.
Other firms aren’t looking at ground-up development, but are looking at redevelopment opportunities.
Beachwood, Ohio-based Developers Diversified Realty Corp. recently began hiring pros with redevelopment experience and the firm is conducting a portfolio-wide review to determine what projects may be suited for redevelopment. It’s looking at everything from simple renovations to complete tear-down opportunities.