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 |
Read full 2014 Giants 300 Report
Related Stories
Metals | Apr 19, 2023
Sherwin-Williams Coil Coatings releases new color forecast for architectural metal coatings
The Coil Coatings division of Sherwin-Williams has released its latest color forecast, FUSE, for architectural metal coatings. The report aims to inspire architects, product manufacturers and original equipment manufacturers (OEMs) in the coil and extrusion market over the next 3-5 years and beyond.
Airports | Apr 18, 2023
India's mammoth new airport terminal takes ‘back to nature’ seriously
On January 15, 2023, Phase 1 of the Kempegowda International Airport’s Terminal 2, in Bengaluru, India, began domestic operations. The 2.75 million-sf building, designed by Skidmore, Owings & Merrill (SOM), is projected to process 25 million passengers annually, while providing its travelers with a healthier environment, thanks to extensive indoor-outdoor landscaping that offers serenity to what is normally a frenzied experience.
Resiliency | Apr 18, 2023
AI-simulated hurricanes could aid in designing more resilient buildings
Researchers at the National Institute of Standards and Technology (NIST) have devised a new method of digitally simulating hurricanes in an effort to create more resilient buildings. A recent study asserts that the simulations can accurately represent the trajectory and wind speeds of a collection of actual storms.
Green | Apr 18, 2023
USGBC and IWBI unveil streamlined certification pathway for LEED and WELL green building programs
The U.S. Green Building Council, Green Business Certification Inc., and the International WELL Building Institute released a streamlined process for projects pursuing certifications for the LEED green building rating system and the WELL Building Standard. The new protocol simplifies documentation for projects that are pursuing both certifications at the same time or that have already earned one certification and are looking to add the other.
K-12 Schools | Apr 18, 2023
ASHRAE offers indoor air quality guide for schools
The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) has released a guide for educators, administrators, and school districts on indoor air quality. The guide can be used as a tool to discuss options to improve indoor air quality based on existing HVAC equipment, regional objectives, and available funding.
Data Centers | Apr 14, 2023
JLL's data center outlook: Cloud computing, AI driving exponential growth for data center industry
According to JLL’s new Global Data Center Outlook, the mass adoption of cloud computing and artificial intelligence (AI) is driving exponential growth for the data center industry, with hyperscale and edge computing leading investor demand.
Healthcare Facilities | Apr 13, 2023
Healthcare construction costs for 2023
Data from Gordian breaks down the average cost per square foot for a three-story hospital across 10 U.S. cities.
Higher Education | Apr 13, 2023
Higher education construction costs for 2023
Fresh data from Gordian breaks down the average cost per square foot for a two-story college classroom building across 10 U.S. cities.
K-12 Schools | Apr 13, 2023
Creating a sense of place with multipurpose K-12 school buildings
Multipurpose buildings serve multiple program and functional requirements. The issue with many of these spaces is that they tend not to do any one thing well.
Healthcare Facilities | Apr 13, 2023
Urgent care facilities: Intentional design for mental and behavioral healthcare
The emergency department (ED) is the de-facto front door for behavior health crises, and yet these departments are understaffed, overwhelmed, and ill-equipped to navigate the layered complexities of highly demanding physical and behavioral health needs.