Chicago Michigan Avenue storefronts are as empty as the city is, real estate agents reinventing retail
CHICAGO (WLS) – Vacancy rates rose sharply in estimated downtown Chicago and surrounding neighborhoods prior to the pandemic, but rose much faster when COVID-19 broke out. It’s now more than 26% in Chicago’s Loop and on the rise in the Michigan Avenue Corridor.
“A lot of stores are gone,” said SanJay Patmaik, a downtown shopper.
From downtown to the Loop, the Gold Coast, and the River North, the I-Team found dozens and dozen of signs for rental and available space.
“Many shops are closed, there are empty spaces,” said Patmaik.
This includes stores like the 60,000-square-foot Uniqlo store in Streeterville and Macy’s in Water Tower Place.
The I-Team spoke to buyers in front of the now vacant, large sales areas of a former Gap and a Forever 21.
“I think maybe another store would come up and see potential in the store and one store would take it over,” said Fredrick LaMarr.
And despite many potential buyers, a real estate research group said the Mag Mile has a vacancy rate of more than 19%, up from around 11% in 2019.
“We have to innovate,” said Jack Lavin, President and CEO of the Chicagoland Chamber of Commerce.
Lavin said the pandemic challenge on Michigan Avenue is filling large, empty retail spaces, some of which were bespoke for the stores now abandoned.
“Michigan Avenue is the economic engine of the city of Chicago. Almost 20% of the jobs are in the Mag Mile district of Chicago, ”said Lavin. “$ 180 million in sales tax revenue is generated by this district, the largest neighborhood in the city of Chicago.”
There are similar vacancy trends in the surrounding inner city quarters. The Loop now has a vacancy rate of 26%, also from an all-time low of less than 10% in 2015.
“There are tons of options for you here, most likely eating and drinking,” said real estate agent Todd Siegel.
He is faced with the hurdles of renting out many of this empty space to landlords in need. An additional challenge is filling storefronts on the ground floor in several new high-rise buildings that were built during the pandemic.
“It’s a challenge and we’re not just looking for bodies and users to take that place, we’re also questioning the business plans of these retailers to ensure that what we’re introducing into this ecosystem doesn’t just become something sustainable today but grow with changing consumer habits and patterns, “explained Siegel.
Siegel and Lavin said they wanted to attract more “experience” concepts, such as the world’s largest Starbucks reserve roastery on Michigan Avenue. Ideas include incorporating groceries, bars, or product demonstrations into retail to give customers a reason to come to the store rather than shop online.
“To see what the new environment is, come up with new ideas and bring new types of retail out here, be it adventure trading, more entertainment or family entertainment, different types of restaurants,” Lavin said.
Chicago city leaders said they too had a plan. They call it the “Central City Recovery Roadmap” to revitalize the larger inner city.
Officials from the city’s business affairs and consumer protection department said an accelerated restaurant licensing program will help fill some empty spaces.
“We are undoubtedly in a moment when the consumer sees a lot of empty shop windows,” said Siegel. “But the reality is behind the scenes, retailers trying to re-imagine what their storefront looks like.”
Changing the look of a storefront can also include dividing large areas into smaller retail stores. The board said many retailers want a smaller space on Michigan Avenue that can also be used to promote more stores and online sales.
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