Chicago’s Magnificent Mile is getting sweeter.
Candy store chain It’Sugar is leasing an 11,400 square foot space at 717 North Michigan Avenue, Crain’s reported, citing broker Greg Kirsch, the executive managing director at Cushman & Wakefield who represented It’Sugar in lease negotiations.
The candy retailer is taking over a spot vacated in August by the Disney Store, a move The Real Deal reported left the Acadia Realty Trust-owned property totally empty.
It’Sugar, a chain of about 100 stores nationwide, is expanding its Chicago-area presence with the Mag Mile lease, and further cutting into high vacancy rates on North Michigan’s 3.2 million square feet of retail space that have just started dropping. Vacancy surged to 26 percent last year, and is now at 24.7 percent, Crain’s reported, citing Cushman & Wakefield.
“It’s peaked, and it’s starting to come down,” Kirsch told Crain’s. “More tenants are circling (North Michigan Avenue), and for the first time in 18 months, I’m seeing tenants that are new to the market.”
While the pandemic kept shoppers away from stores throughout the city, the worst of it may be over for the Mag Mile, the city’s most famous shopping area. Foot traffic in the 400 block in January was higher than in the same month pre-pandemic, the Chicago Tribune reported, citing the Magnificent Mile Association.
With e-commerce posing a growing threat, though, changes in strategy on the Mag Mile are needed, including creating smaller-scale luxury boutique retail spaces on its northernmost end, and emphasizing development of experience-based attractions, especially between East Delaware Place and Chicago Avenue, rather than focusing on solely shopping, officials and consultants for the city have recommended.
“You have large retail vacancies, you have malls, places that really require interventions. Our idea is to facilitate these becoming experiential zones,” Max Meyer of R2 Companies said during a December presentation on improving the Mag Mile hosted by Urban Land Institute and the city.
Kirsch of Cushman told Crain’s he expects landlords to turn retail spaces on second and third floors of Mag Mile buildings into other uses, or redevelop retail properties into high-rises. Chopping the supply of retail space would help the market, he said.
“We need to shrink the market from 3.2 million square feet to 2.5 million square feet,” he told Crain’s.
[Crain’s] – Sam Lounsberry
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Chicago
Disney Store departs Mag Mile, leaving Acadia’s prime retail corner vacant