Despite retail vacancies in the Loop dropping to the lowest level in at least 14 years, a recent report has some experts questioning the future health of Chicago’s Magnificent Mile, one of the nation’s premier shopping corridors. While the famed strip of Michigan Avenue is enjoying a current vacancy rate of just 3.2 percent, Crain’s reports that the amount of available space could be as high 12 percent.
Apple is leaving its 679 N. Michigan Avenue store for a new Norman Foster-designed flagship space at Pioneer Court and neighboring electronics retailer Garmin is expected to leave its flagship store at 663 N. Michigan Ave after its lease expires in November. It is also reported that the Crate & Barrell at 646 N. Michigan Ave as well as luxury watch boutique Tourbillon at 545 N. Michigan are both being actively marketing their locations to other retailers.
In addition to existing retail space flooding the market as tenants look elsewhere, potential new developments in the Mag Mile’s pipeline are also fueling concern among some experts. The proposed expansion of the Shops at Northbridge to the empty lot located at 443 N. Wabash plus the pending sale and repositioning of the Tribune Tower (which would likely include the redevelopment of the landmark building’s adjacent parking lot) could see a glut of new square footage come online in the coming years.
Beyond concerns over ballooning supply, some retailers are also balking the Mag Mile’s stratospheric rents which can reportedly exceed $650 per foot. While the trend among certain retailers to resist new high-risk downtown flagship locations has resulted in some new stores being opened along Chicago’s neighborhood commercial corridors, competition from online shopping has seen the stakes raised ever higher for brick-and-mortar retailers across the board.
Despite the uncertainty, other real estate professionals are more bullish on Michigan Avenue’s future. Considering the cyclical nature of the retail market as well as new hotel and residential developments in the works amidst Chicago’s record tourism numbers, it’s far from all doom and gloom on downtown’s Mag Mile.
- Lag Mile? North Michigan Avenue retail vacancies on the rise [Crain’s]
- Mag Mile's Southward Expansion Helps Slash Loop Retail Vacancy to 14-year Low [Curbed Chicago]
- River North Parking Lot Could See Expanded Shopping Mall, Maybe More [Curbed Chicago]
- Previous Mag Mile coverage [Curbed Chicago]