CHICAGO (WLS) — The vacancy rate was rising sharply across Chicago’s prized downtown district and surrounding neighborhoods before the pandemic, but climbed much faster once COVID-19 struck. It’s now more than 26% in Chicago’s loop and on the rise in the Michigan Avenue Corridor.
“Many stores are gone,” said downtown shopper SanJay Patmaik.
From downtown to the Loop, the Gold Coast and River North, the I-Team found dozens and dozens of for lease and space available signs.
“A lot of shops are closed down, there’s empty places,” Patmaik said.
That includes shops like the 60,000 square foot Uniqlo store in Streeterville and Macy’s in Water Tower Place.
The I-Team talked to shoppers in front of the now empty, large retail spaces of a former Gap and a Forever 21.
“I think maybe another store would come up and see potential in the business and a store would take it over,” said Fredrick LaMarr.
And despite plenty of potential shoppers, one real estate research group said the Mag Mile has more than a 19% vacancy rate, up from about 11% in 2019.
“We need to be innovative,” 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 which were tailor made for the stores now left behind.
“Michigan Avenue is the economic engine of the city of Chicago. Almost 20% of the jobs are in the mag mile district jobs in the city of Chicago,” Lavin said. “$180 million of sales tax revenue is generated by this district, it’s the largest neighborhood in the city of Chicago.”
There are similar vacancy trends in surrounding downtown neighborhoods. The Loop now has a 26% vacancy rate, also up from an historic low of less than 10% in 2015.
“There’s a myriad of opportunities for here you know most notably probably food and beverage,” said real estate broker Todd Siegel.
He’s facing the hurdles of leasing many of these empty spaces for landlords in need. Filling ground floor storefronts in several new high-rises which were built during the pandemic presents an additional challenge.
“It’s challenging and not only are we just looking for bodies and users to take that space, but we’re challenging the business plans behind those retailers make sure that what we’re introducing into this ecosystem is something that not only is going to be sustainable today, but grow as consumer habits and patterns change,” Siegel explained.
Siegel and Lavin said they want to attract more “experience” type concepts, such as the world’s largest Starbucks reserve roastery on Michigan Avenue. Ideas include integrating food, bars, or product demonstrations into retail, giving customers a reason to come in to the store rather than shopping online.
“To look at what the new environment is come up with new ideas and bring new types of retail here whether it’s experiential retail, more entertainment or family entertainment, different types of restaurants,” said Lavin.
City of Chicago leaders said they too have a plan. They call it the Central City Recovery Roadmap to revitalize the greater downtown area.
Officials with the city’s Business Affairs and Consumer Protection Department said an expedited restaurant licensing program will help fill some empty spaces.
“There’s no doubt we’re in a moment in time where the consumer sees a lot of empty storefronts,” Siegel said. “But the reality is behind the scenes, retailers are trying to reimagine what their storefront looks like.”
Changing what a storefront looks like could also include breaking large spaces up into smaller retail shops. The chamber said many retailers want a space on Michigan Avenue that’s smaller, which can also be used to promote more business and sales online.
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