Which New Retailer Is Ready to Take on Chicago?
Industry veteran hints at new entrant coming to "challenging" market
Published in CSP Daily News
CHICAGO -- While established Chicago-area marketers like Speedway, Bucky's and Thorntons continue to build new-to-industry units in the Chicago metropolitan area, an experienced industry veteran believes that the market is ripe for the development of 100 high-volume stores by a new entrant over the next five years.
CSP Daily News has learned exclusively that Rick Claes, former president and CEO of Thorntons Inc., is in negotiations with several large regional convenience store chains to launch expansion into the Chicago market.
Claes is now the senior managing director of Mesirow Single Tenant Properties, an affiliate of Mesirow Financial, a Chicago-based diversified financial services firm with more than $80 billion of assets under management. According to its website, Mesirow Single Tenant Properties offers fully entitled, "shovel-ready" sites to freestanding retailers with near-term accelerated growth plans in major markets across the United States. These locations are offered to retailers pursuant to triple-net, long-term ground leases or build-to-suit leases.
When reached for comment, Claes said, "While I am not at liberty to divulge the names of the firms, I can confirm that discussions are ongoing, and I believe that the Chicago market presents a significant opportunity for an experienced marketer with the ability to operationally assimilate an accelerated growth plan."
Claes speaks with credibility, having developed 39 of Thorntons 42 stores in the Chicago market, including the two stores it currently has under construction in Bensenville and Aurora, Ill., and more than 100 of Thorntons 175 stores.
"New-store development in the Chicago market can certainly be challenging--it is not for the faint of heart," said Claes. "In the end, all of the blood, sweat and tears pay off, however, as well-located units in this market experience extraordinary volume and fuel margins have been very stable over the last several years."
Looking at a map of the eastern half of the United States, it is not difficult to assemble a list of prospective candidates for a Chicago market expansion. Kwik Trip, Holiday, SuperAmerica, Kum & Go, Casey's and Huck's each have operating units within several hours drive of Chicago, but do not currently operate stores in the metropolitan area. Given the size of the opportunity, it may even pique the interest of ETP, Lehigh, TravelCenters of America, RaceTrac, QuikTrip, Sheetz or Mapco.
Claes refused to confirm or deny the interest of any of these operators.
"Within the next few months, we will be engaged by a retailer interested in expanding into this market, and their identity will be abundantly clear."
Claes did confirm that his firm has more than a dozen sites currently under contract and another 20 locations in various stages of negotiation. He said that Mesirow Single Tenant Properties' model is similar to the developer supported ground lease model that Wawa is successfully using to accelerate its growth in Florida with a few notable exceptions.
"Unlike most regional developers, we are very well capitalized and have the ability to deliver 20 sites per year to a retailer. As a result, we can offer significant economies of scale to the operator and dramatically streamline the development process."
He added, "We focus exclusively on single-tenant, freestanding retailers and prefer to form a programmatic relationship with a single operator and serve as their development partner in a specific market."