Retail vacancy in Chicago’s Loop fell to its lowest level in at least 14 years, according to a recent report by Chicago-based commercial brokers Stone Real Estate that appeared in Crain’s. Stone, which began compiling its data in 2002, reported a 2015 Loop retail vacancy rate of 9.9 percent, marking a substantial improvement over the area’s peak vacancy of 18.2 percent reported in 2004. So what’s behind the latest numbers?
Though Michigan Avenue and State Street have been traditional shopping hubs, the latest data shows a southward migration of energy. Michigan Avenue’s Magnificent Mile north of the Loop actually saw vacancies rise from 9.9 to 11.3 percent last year. Chicago’s most famous shopping district is in the midst of a realignment towards the Loop proper as the year-round draw of Millennium Park will soon pair with new developments like the apartment tower at 200 S. Michigan, the London House hotel conversion, and Apple’s upcoming move to a Norman Foster-designed flagship store at Pioneer Court. State Street, meanwhile, has virtually no store front vacancies and current retailers are enjoying strong returns, according to Stone.
The prosperous Loop retail market coincides with a national movement that has seen an increasing number of both office tenants and residents flock to urban centers. While this certainly bodes well for downtown areas, growth can often come at the expense of the outlying communities. It’s likely no coincidence that downtown Chicago’s retail boom comes at a time when more and more suburban shopping centers are shutting down.
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