As it entered its sixth decade, Cermak Plaza in Berwyn began a dramatic face lift, a move that has since paid off with recent leases to Meijer and K&G, bringing the property to 98 percent leased.
Like most retail centers, Cermak Plaza was hit hard when the recession began. One of its main anchors was Circuit City. The nationwide electronics retailer filed for bankruptcy in 2008 and liquidation would soon follow. The move left a 33,000-square-foot vacancy on the west end of the 300,000-square-foot center in Berwyn.
This blow coincided with several other vacancies at Cermak Plaza, which reached a 40 percent vacancy at its height, says Michael Flight, principal at Concordia Realty.
The family-owned retail center may have been down, but it was far from out. The owners began a redevelopment process in 2008 that would revitalize Cermak plaza and eventually capture high-profile tenants in an otherwise bleak environment. The facility underwent a significant façade redevelopment, parking lot upgrades, and a green element with LED lighting and wind turbines for clean energy.
Traditional strip centers and power centers in outlying suburbs had grown tremendously in the past decade, yet as the recession set in, retailers began to rethink strategy. Population density and established communities became more important than large spaces and cheap land. Anchor tenants began looking at vacant spaces in inner ring suburban and urban areas. Cermak Plaza’s redevelopment seemed to be striking while the iron was hot.
“Things changed in 2009 when a large group of anchor tenants took advantage of an abundance of vacant space,” says Flight. “A number of anchor tenants were pushing to get into the market and that actually swung rents dramatically. We saw a $10 per square foot rent swing in 2009.”
The leases were soon to follow. Walgreens moved to an out-parcel lot on the site, downsizing from 32,000 square feet to 16,000 square feet. The move
allowed Marshalls to expand to 35,000 square feet from 24,000 square feet. Fashion retailer K&G opened in 2010 with a 23,000-square-foot store.
Office Depot relocated to the former Circuit City building, taking 19,000 square feet, while Dollar Tree signed on for the remaining 13,000 square feet and will be opening in two months.
The relocation of Office Depot would lead to the development’s biggest coup as it freed up a large block of space in the center of the facility. Concordia used that space to lure Meijer. The regional grocer recently announced that it will occupy a 93,330-square-foot space.
Mark Trimble, principal with MLT Consulting Engineers, says that his firm will develop the pad for Meijer and will have it delivered by June. Meijer will then begin construction on its facility and open in 2012.
The Meijer lease was not only big for Cermak Plaza, but also the City of Berwyn.
“We didn’t have a super-regional grocery store chain in Berwyn until now,” says Tim Angell, senior project manager at Berwyn Development Corp. “We have local stores, but not regional chains. This allows people to shop Berwyn first. Instead of residents leaving town to shop, it allows us to capture more sales tax revenue.”
With this latest lease, Cermak Plaza only has 5,000-square-feet available, says Concordia’s Flight.
The new-look center also has an aesthetic and energy efficient aspect that has appealed to new and existing tenants. A LED lighting system is powered by 12 wind turbines that have been installed in the center’s parking lot. The turbines power the shared lighting for the space and excess power goes back onto the grid. The turbines currently generate more power than is necessary to power the lighting system. The development receives a credit from ComEd for developing the extra power and tenants see the savings.
“Tenants see savings on the electricity in common areas,” says Flight. “It was about 20 cents per square foot before, but now they won’t see that on their electricity bills.”
Flight says that the firm went with the wind turbines because it kept in the spirit of the plaza, which is known for its public art. Many locals were upset when some rather famous public sculptures were torn down in the redevelopment process. Flight points out that Cermak Plaza still has 20 pieces of public art on display and that the wind turbines pay homage to the center’s previously famous sculpture, the Spindle-a stack of old cars impaled on a giant needle.
© 2014 Real Estate Communications Group. Duplication or reproduction of this article not permitted without authorization from the Real Estate Publishing Group. For information on reprint or electronic pdf of this article contact Mark Menzies at 312-644-4610 or email@example.com