Market Snapshot: Chicago Shops!
- Feb 23, 2015
After struggling to recover from the recession that impacted the U.S. in recent years, Chicago’s economy is improving at a steady pace, and the retail sector is following suit. 2,000 jobs were created in the retail industry in December 2014, according to data collected by CBRE. The market is experiencing positive growth, driven by the drop in unemployment, job growth, and a spike in consumer confidence. All these factors have led to a drop in vacancy rate from 9.8 percent in the third quarter of 2014 to 9.5 percent in the fourth. CBRE also reports that net asking lease rates have increased from $17.73 in Q3 to $17.85 in Q4, proving that Chicago’s retail market is in high demand.
As the Chicago retail industry is gaining momentum, new retailers are bringing their business to the area in 2015. Tampa, Florida-based Burger 21 will open its first Chicago suburban restaurant in the Rosemont area this year, while Uber plans to create 75 new jobs in the city. Shake Shack opened a store in River North in November 2014 at 66 E Ohio St, and intends to occupy the first floor of the Chicago Athletic Association Hotel at 12 S Michigan Ave, CBRE reports. Leasing activity in the city also gained momentum in 2014; notable transactions include Hobby Lobby’s 51,190-square-foot lease in Deerfield and Sports Authority’s 40,000-square-foot lease in Joliet.
Both local and out-of-state investors are being drawn to the booming Chicago retail market. HFF recently secured a $34 million refinancing for Shops at Kingsbury Square, a prime retail property anchored by a flagship Whole Foods store at 1550 N Kingsbury St in Lincoln Park, while Acadia Realty Trust acquired an 88 percent interest in 840 N Michigan Ave on Chicago’s Magnificent Mile. Another significant development is in the works for 2016, as Inland Real Estate Corp. is set to build a 133,000-square-foot shopping center in Archer Heights, bringing more than 300 permanent jobs to the area.
Chart courtesy of CBRE