More telecommunications companies are disconnecting from the Mag Mile, adding to a brutal stretch for the famous retail strip that’s still reeling from the pandemic.
T-Mobile left its 11,000-square-foot store at 700 North Michigan Avenue, and AT&T plans to vacate its 10,400-square-foot space a few blocks south, at 600 North Michigan, on Aug. 1, Crain’s reported. Rival company Verizon ditched its 27,000-square-foot store at 840 North Michigan in April.
Ashkenazy Acquisition, which owns the building at 700 North Michigan, and Clarion Partners, owner of 600 North Michigan, join the growing list of Mag Mile landlords who have costly voids to fill. Household brands that have left the once-thriving shopping strip include Banana Republic, Gap, Uniqlo, Macy’s and Timberland.
The pandemic accelerated the rise of online shopping, lowering demand for retail space. The Mag Mile’s vacancy rate is up to about 30 percent, slightly above the Loop’s retail vacancy rate of 28.3 percent at the end of last year. With rents still high and foot traffic nowhere near pre-pandemic levels, leaving the Mag Mile has been an obvious choice for a number of companies.
AT&T moved into its store on Michigan Avenue in 2012, and T-Mobile followed several years later. The concentration of telecommunications firms reflects the “herd mentality” that’s common among retailers, according to retail broker John Vance of Stone Real Estate.
“There was a time about 10 years ago that these telecom companies needed to engage much more with the customer,” Vance told the outlet. “They all decided to do it and they all took too much square footage than they needed.”
AT&T and T-Mobile are both in the process of adapting their business strategies as the market changes, balancing a mix of smaller storefronts and more digital channels. T-Mobile is opening a new store at 4 East Cedar Street in the Gold Coast that opens June 23.
For Ashkenazy and Clarion Partners, the departures aren’t necessarily a bad thing because it “allows the more appropriate and on-trend retail categories to come in and highlight what they’re all about,” Vance told the outlet.
— Quinn Donoghue
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