Retail Giants: Grocery-anchored centers, trophy malls among hot retail developments [2014 Giants 300 Report]

Despite the rapid growth of online shopping, the 'bricks and mortar' retail sector is faring quite well.

Urban and TOD projects like the CitySet Cherry Creek retail center in Glendale,
Urban and TOD projects like the CitySet Cherry Creek retail center in Glendale, Colo., remain a strong investment opportunity for developers. Completed in 2013, the project is Denver’s first blended “gastronomic urban village” and hotel district, with a mix of retail stores, restaurants, breweries, two hotels, and underground parking, on a city block. PHOTO: COURTESY STANTEC
August 04, 2014

Pop quiz time: Of the total retail sales in 2013, what percentage came from online shopping? 

Twenty-five percent? Nope, lower. Twenty percent? Not even close. Ten percent? Getting warmer.

Would you believe that, even with the e-commerce sector’s torrid pace of growth during the past decade, online sales represented just 6% of all retail business last year?

The gloom-and-doom scenario for bricks-and-mortar retail that is portrayed in the media is grossly overstated. It makes for good headlines, but it’s not based in fact, according to Jones Lang LaSalle’s latest retail sector outlook.

“Remember catalogs? Flipping through the pages, dialing up a call center, and placing an order? Web sales are really just replacing that,” said Kris Cooper, Managing Director, JLL Capital Markets. “People still need to see and touch things. The instant gratification of an in-store purchase can’t be discounted. Retailers who want to thrive will need to incorporate it all—hands-on goods, e-commerce, and mobile commerce.”


Giants 300 coverage of Retail brought to you by: C.R. Laurence www.crlaurence.com.

That’s not to say the retail sector doesn’t have its issues. There has been a spate of big-name store closings recently—including Coldwater Creek, Office Depot, and Radio Shack—and retailers continue to struggle to adjust to the structural changes occurring in their industry. 

But, all in all, the U.S. retail sector is faring quite well, according to JLL, continuing its solid recovery and exhibiting tightening market conditions. The real estate group expects asking rents nationally to rise 2.7% this year, following 1.1% growth in 2013, and vacancy rates to drop more than 6% for the second straight year.

Net absorption was up a whopping 42% in 2013, to 83.2 million sf. With increased demand for retail space, landlords are starting to exert some power in tenant selection and lease terms, according to JLL.

Here are some highlights from the firm’s Spring 2014 Cross Sector Outlook (http://tinyurl.com/JLLCrossSectorOutlook):
• Power centers are experiencing the tightest overall market conditions, with a total vacancy rate of just 5.1%.
• Investment dollars are flowing into high-quality, grocery-anchored centers and trophy malls. “Demand for those asset types is incredible right now—if only we could convince all the owners to bring those to market,” said Margaret Caldwell, Managing Director, JLL Capital Markets.  
• Construction growth will remain marginal during the next 12 months. New construction is focused primarily on single-tenant big-box and discount/wholesale space. Of the multi-tenant projects under construction, the majority are in urban cores and peripheral outlet centers.
• As the market continues to recover, the retail construction sector will eventually see an uptick in construction where tenants demand new space because supply is so constrained, where rents are high enough to justify construction, and where there are few barriers to new development, such as Orlando, Fla.
• Retail property transactions were strong in 2013. Sales of significant retail properties totaled more than $60.8 billion in 2013, up 8% from the previous year. Sales of strip centers and single-tenant properties fared even better, rising 26% year over year.
• There are strong opportunities for development in Sunbelt markets with higher-than-average population growth rates, including Charlotte, N.C., Orlando, and Raleigh, N.C.

 

SIGNS OF LIFE FOR SHOPPING CENTERS

For the first time since 2007, shopping center development in the U.S. increased year over year, according to Cushman & Wakefield’s new Global Shopping Center Development Report (http://tinyurl.com/CWreport). Nearly 400 shopping centers totaling more than 12.2 million sm of gross leasable area (GLA) were completed in 2013, an increase of 12.7% compared to the previous year. 

In fact, the U.S. has accounted for roughly 18% of all new shopping center space delivered worldwide since 2008, according to the report. And there’s no slowdown in sight.

During the next three years, an additional 758 centers containing approximately 11.2 million sm of new GLA will be added to the U.S. inventory, two-thirds of which is expected to be completed in 2014 alone. Developments in California, Florida, and Texas will make up about a third of all new shopping center construction during this period, according to Cushman & Wakefield.

While the large malls get all the headlines—like the long-delayed, 274,000-sm American Dream Meadowlands development in East Rutherford, N.J.,  and the 149,000-sm Shops at Summerlin (Nev.) Centre—the vast majority of new construction projects are small shopping centers, between 5,000 sm and 20,000 sm, with the average project at 17,700 sm. 

 

Top Retail Architecture Firms

Rank Company 2013 Retail Revenue
1 Callison $109,251,013
2 Gensler 105,979,349
3 RTKL Associates 66,018,000
4 MulvannyG2 Architecture 60,000,000
5 Stantec 57,434,454
6 WD Partners 44,000,000
7 RSP Architects 36,346,000
8 Little 27,786,704
9 MBH Architects 25,106,000
10 FRCH Design Worldwide 24,600,000
11 P+R Architects 19,191,791
12 Architects Orange 14,036,393
13 CTA Architects Engineers 14,020,991
14 DLR Group 13,900,000
15 NORR 12,997,934
16 CASCO Diversified Corp. 12,500,000
17 Bergmann Associates 12,416,000
18 Nadel 9,000,000
19 Perkins Eastman 7,750,000
20 Ware Malcomb 7,600,000
21 HOK 7,345,023
22 Good Fulton & Farrell 7,324,000
23 LawKingdon Architecture 7,250,000
24 Cooper Carry 4,000,988
25 API 3,800,000
26 Massa Montalto Architects 3,482,000
27 Beyer Blinder Belle 3,205,403
28 RS&H 2,450,000
29 Smallwood, Reynolds, Stewart, Stewart & Associates 2,391,617
30 Vocon 2,366,525
31 Gresham, Smith and Partners 2,299,000
32 Cuningham Group Architecture 2,166,411
33 ai Design Group 2,093,530
34 Solomon Cordwell Buenz 1,700,000
35 LPA 1,637,397
36 BLTa 1,302,000
37 NBBJ 1,285,000
38 Kohn Pedersen Fox Associates 1,280,000
39 TK Architects 1,155,876
40 LS3P 1,061,129
41 Ratio Architects 990,326
42 Eppstein Uhen Architects 954,480
43 RDH Interests 922,242
44 Carrier Johnson + Culture 702,235
45 Environetics 625,747
46 Colkitt & Company 600,000
47 GBBN Architects 558,000
48 Harvard Jolly Architecture 533,943
49 VOA Associates 521,057
50 JRS Architect 490,000
51 WATG | Wimberly Interiors 472,000
52 SchenkelShultz Architecture 453,000
53 Nelson 393,822
54 Goodwyn Mills & Cawood 378,423
55 Wight & Company 371,000
56 Moody Nolan 361,308
57 PGAL 350,300
58 Parkhill, Smith & Cooper 336,000
59 Montroy Andersen DeMarco 310,000
60 Becker Morgan Group 287,996
61 PHX Architecture 280,000
62 Morris Architects 260,000
63 BRPH 225,000
64 Mithun 210,000
65 FitzGerald Associates Architects 151,500
66 Clark Nexsen 143,328
67 Commonwealth Architects 141,268
68 Baskervill 115,284
69 Skidmore, Owings & Merrill 108,913
70 Adache Group Architects 100,000
71 Corgan 74,847
72 Hnedak Bobo Group 72,000
73 Hoefer Wysocki Architecture 70,000
74 Niles Bolton Associates 65,728
75 ATA Beilharz Architects 60,180
76 Hensley Lamkin Rachel 50,000
77 KZF Design 47,356
78 Heery International 45,840
79 TEG Architects 12,163

 

 

Top Retail Engineering Firms

Rank Company 2013 Retail Revenue
1 Jacobs $182,720,000
2 AECOM Technology Corp. 105,890,000
3 Henderson Engineers 43,369,857
4 URS Corp. 36,003,188
5 Wiss, Janney, Elstner Associates 19,090,000
6 Parsons Brinckerhoff 16,431,889
7 Dewberry 9,513,612
8 Thornton Tomasetti 8,339,454
9 Wallace Engineering 7,667,000
10 KLH Engineers 6,506,748
11 Shive-Hattery 6,232,480
12 Arup 5,674,014
13 Dunham Associates 5,500,000
14 Highland Associates 4,600,000
15 Magnusson Klemencic Associates 4,133,492
16 Coffman Engineers 3,992,285
17 Hixson Architecture, Engineering, Interiors 3,100,000
18 Davis, Bowen & Friedel 2,748,648
19 Leidos 2,520,000
20 WSP Group 2,270,000
21 Fishbeck, Thompson, Carr & Huber 2,200,000
22 AKF Group 2,140,000
23 French & Parrello Associates 1,985,000
24 KJWW Engineering Consultants 1,686,418
25 RDK Engineers 1,670,000
26 Martin/Martin 1,614,144
27 Interface Engineering 1,573,325
28 Simpson Gumpertz & Heger 1,570,000
29 Aon Fire Protection Engineering Corp. 1,500,000
30 CTLGroup 1,450,000
31 SSOE Group 1,423,552
32 Graef 1,189,813
33 Bala Consulting Engineers 1,051,000
34 M-E Engineers 1,000,000
35 Heapy Engineering 969,445
36 Wick Fisher White 893,105
37 OLA Consulting Engineers 888,800
38 Walter P Moore and Associates 847,312
39 TTG 732,500
40 DeSimone Consulting Engineers 691,425
41 H.F. Lenz 652,000
42 Paulus, Sokolowski and Sartor 650,000
43 I. C. Thomasson Associates 600,000
44 Vanderweil Engineers 576,000
45 Stanley Consultants 447,960
46 Zak Companies 422,811
47 Glumac 421,563
48 Allen & Shariff 400,000
49 KCI Technologies 400,000
50 Spectrum Engineers 345,820
51 TLC Engineering for Architecture 342,071
52 G&W Engineering Corp. 217,100
53 Sparling 204,890
54 Total Building Commissioning 125,702
55 Apogee Consulting Group 115,325
56 Barge Waggoner Sumner & Cannon 100,000
57 Brinjac Engineering 80,270
58 GHT Limited 75,000

 

 

Top Retail Construction Firms

Rank Company 2013 Retail Revenue
1 PCL Construction $517,371,436
2 Whiting-Turner Contracting Co., The 479,057,948
3 Shawmut Design and Construction 386,000,000
4 EMJ Corp. 317,000,000
5 Turner Construction 236,380,000
6 Balfour Beatty US 195,847,685
7 Lend Lease 150,997,000
8 Yates Companies, The 122,000,000
9 Hawkins Construction 98,500,000
10 Gray Construction 97,770,000
11 O'Neil Industries/W.E. O'Neil 93,703,312
12 Beck Group, The 81,576,752
13 Power Construction 78,000,000
14 S. M. Wilson & Co. 72,877,695
15 E.W. Howell 71,900,000
16 Structure Tone 71,080,000
17 DPR Construction 70,199,893
18 Choate Construction 68,627,625
19 KBE Building Corp. 68,022,822
20 Ryan Companies US 67,191,615
21 Weitz Company, The 64,819,854
22 Pepper Construction 62,870,000
23 JE Dunn Construction 62,738,348
24 Graycor 59,864,863
25 Hoar Construction 53,500,000
26 Hill & Wilkinson 51,935,000
27 McCarthy Holdings 50,650,000
28 Management Resource Systems 45,255,861
29 Leopardo Companies 39,729,783
30 Weis Builders 37,993,000
31 URS Corp. 36,003,188
32 Layton Construction 35,900,000
33 Clark Group 35,131,316
34 Brasfield & Gorrie 33,249,173
35 EBCO General Contractor 33,134,000
36 JLL 30,323,117
37 Paric Corp. 25,000,000
38 Skanska USA 24,038,261
39 C.W. Driver 23,670,000
40 James G. Davis Construction 22,850,344
41 Walbridge 22,200,000
42 Hill International 21,000,000
43 Tutor Perini Corp. 20,562,786
44 Bomel Construction 19,179,585
45 Kraus-Anderson Construction 19,000,000
46 Clune Construction 17,825,626
47 Austin Commercial 17,584,385
48 CORE Construction Group 17,295,729
49 Parsons Brinckerhoff 16,431,889
50 Hoffman Construction 14,000,000
51 LeChase Construction Services 13,120,000
52 Gilbane 12,521,010
53 IMC Construction 12,332,000
54 Kitchell Corp. 11,602,544
55 Suffolk Construction 10,523,993
56 McShane Companies, The 6,599,886
57 Manhattan Construction 6,170,000
58 Bernards 4,700,000
59 Adolfson & Peterson Construction 3,534,704
60 Robins & Morton 3,351,771
61 Batson-Cook 2,741,450
62 Stalco Construction 2,310,600
63 Bette Companies, The 1,548,000
64 Walsh Group, The 1,485,547
65 W. M. Jordan Company 965,753
66 Douglas Company, The 772,135
67 Allen & Shariff 400,000
68 Alberici Constructors 156,054

 

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