Challenging retail market might just make it cheaper to rent in Naperville
By Ruth Moon
Naperville might not have a reputation as a cheap date, but in at least one area, the nickname fits — downtown retail rent is cheaper than some other high-end areas in the western suburbs.
The average rent for the county is $16.90 per square foot per year, according to information collected by DuPage County. Rates in Naperville, Hinsdale, Downers Grove, Wheaton, Glen Ellyn, Lisle and Oak Brook all run a little higher than the average, but some suburban property owners are ready to negotiate prices as the economy slows and interest in retail property decreases.
Naperville downtown rents range from $17 to $22 per square foot, said Nick Birizzi, a Realtor with Coldwell Banker Real Estate. Glen Ellyn rent is comparable, but only Lisle, of the suburbs surveyed, offers cheaper rent at $12 to $21 per square foot.
No matter the rate, though, properties are generating less interest during the recession.
Will Cullen, a private property manager in Downers Grove, owns a 7,000-square-foot retail space that he is trying to lease for $24 per year per foot. He may cut a few dollars off the lease price or split the price of improvements with the lessee because of the economy.
“Three or four years ago we had no problem renting that,” he said. “Now it’s more challenging, so you’ve got to be more creative.”
About 9 percent of the retail space in the village of Hinsdale is empty now. Like in Downers Grove, property owners are more willing to negotiate this year because the economy, said Tim Scott, community development strategist for the village.
“There’s deal making to be had, whereas when we had a lot of stability the opportunities weren’t as present,” Scott said.
But even reduced rents and deals are failing to attract some renters.
Woodstock-based Realtor Tom Harding, president of Harding Real Estate, has several properties for lease in Glen Ellyn — a 5,500-square-foot space for which he is asking $16 per square foot and a 1,100-square-foot space at $22 per foot. He is still looking for lessees.
The property market fluctuates depending on the type of property, Harding said. The housing market is slow right now. Commercial property is usually generating more interest, but retail space is still empty.
“Two-thirds of the space is vacant, so you can make that say whatever you want,” Harding said. “(The market) is not as responsive as it was a year ago but hopefully the next year or 18 months will be showing signs of improvement.”
Pam Mitrius, a Downers Grove-area Realtor, said prospective buyers/renters are slowing down before snatching up retail property because of the commitment involved.
“The confidence level has dropped significantly. People are being a lot more careful,” she said. “When you have a retail space, so much depends on location, the surrounding businesses and parking. People are not so quick to set up shop and try to make it.”
And after property is leased, the challenges of dealing with a slow retail market await.
In Naperville, shops are opening about as quickly as they close, said Katie Wood of the Downtown Naperville Association.
“The pain started to hit around October,” she said. “We’ve seen it fluctuate, but as many as have moved on we’ve opened. It’s about a wash at this point or a slight gain.”
Kenneth Carlson, joint owner of the Carlson Paint, Art and Wallpaper shop in downtown Wheaton, said business right now is the worst he’s seen it since he started working with the business in the 1970s.
Carlson owns the property his store is on and leases property to other retailers in downtown Wheaton. He said he will take the economy into consideration when he renegotiates the leases this year. His business has seen worse times; his grandfather started it as a paint store in 1915, and it weathered the Great Depression on credit from paint manufacturers.
“The Great Depression was certainly a lot more severe than this is now, although as far as I’m concerned this is the most serious I’ve seen it since I’ve been in business,” Carlson said. “Since the financial crash, the bottom dropped out of everything. I only have comfort in the fact that at least everyone else I talk to is in the same boat.”
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