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

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