Retail market stages a rebound as vacancies drop

Tenants stick around as demand stays low

2 Orland Square Drive in Orland Park and CBRE's Joe Parrott (Google Maps, CBRE, Getty)
2 Orland Square Drive in Orland Park and CBRE's Joe Parrott (Google Maps, CBRE, Getty)

Chicago’s retail market is starting to rebound.

Vacant anchor retail space in the Chicago area dropped 16 percent to 13.2 million square feet this year from its 2020 peak of 15.7 million, Crain’s reported, citing CBRE data. Landlords are securing more space as fewer stores close.

After the 2018 bankruptcies of Carson’s and Toys R Us and a separate wave of store closures by Sam’s Club and Sears, the market is showing signs of stabilization. The ability of retailers to stick around has counterbalanced low demand for big-box space.

CBRE said the anchor vacancy rate is still 60 percent higher than in 2016 and rents have dropped to an average of $9.53 per square foot, down from the most recent peak of $12 in 2017.

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“We’ve still got a ways to go to get back to the norm, unless this is the norm,” CBRE’s Joe Parrott told the outlet. The report tracked spaces measuring 20,000 square feet or more within 56 miles of the largest shopping areas in Chicago’s metropolitan area.

One wild card: The individual financial health of big-box retailers. “It really depends on whether we have any major bankruptcies,” Parrott said.

Parrott has been hired to lease many of the empty storefronts. He filled a vacant Sears store in North Riverside Park Mall with a combination of a bowling alley, a health office and a smaller chain department store. In Orland Park, Parrott, along with a CBRE team, is looking for a buyer for the empty 203,000-square-foot Sears at the Orland Square Mall. Parrott said he expects whoever buys the building, closed for about four years, to redevelop the building into a mixed-use property.

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Continental Realty Corporation ceo JM Schapiro and 425-569 E. Dundee Road in Palatine and 3027 S. Cicero Avenue in Cicero, and 1000-1080 S. Elmhurst Road in Mount Prospect in Illinois (Google Maps, Loopnet, Continental Realty Corporation, Getty)
JM Schapiro drops $94M on suburban Chicago retail

— Victoria Pruitt