The spotlight is shining bright on Chicago’s record-high office vacancy rate, but the city’s retail sector isn’t faring any better.
Downtown Chicago’s retail vacancy rate climbed to 30.13 percent in 2023, up from 28.32 percent the previous year and more than double the rate of 2019, Crain’s reported, citing Stone Real Estate.
Last year’s vacancy rate is the highest figure on record since 2002, when Stone began tracking such data.
The prolonged dearth of office workers, tourists and residents due to the pandemic has left many downtown businesses struggling to stay afloat. With professionals still hesitant to return to offices in significant numbers, retailers are grappling with declining foot traffic and dwindling confidence, along with an increase of e-commerce.
“We’re going to be at the fourth anniversary of the COVID shutdown, which is a long time, and I think that the retailers, whether they be national or local, over this time period have just said, ‘I can’t do this anymore,’” Stone Real Estate principal John Vance told the outlet.
The impact of the pandemic extends beyond the Loop’s main thoroughfares, especially for the LaSalle-Wacker submarket, where the retail vacancy rate jumped from 34.48 percent in 2022 to 36.22 percent last year, which was the highest rate in Chicago.
But amid the gloom, there are glimmers of hope. City initiatives, including a plan to convert vacant office buildings to apartments in the LaSalle-Wacker area, offer potential solutions to revitalize struggling areas.
“If a residential component existed on LaSalle Street, or in and around LaSalle Street, so that retailers could reasonably think, ‘Wow, there’s Saturday afternoon business down here — there never was before, but now there is,’ that would greatly help that retail environment,” Vance said.
Looking ahead, 2024 is poised to be a year of strategic collaboration between landlords and tenants as they navigate the challenges of filling long-empty spaces. While the road to recovery may be long and arduous, innovative solutions and concerted efforts hold promise for breathing life into Chicago’s once-vibrant retail landscape.
Several iconic shopping corridors still face a murky future, though. The Magnificent Mile, for instance, experienced a surge in vacancies, from 25.9 percent in 2022, to 28.18 percent in 2023. State Street’s vacancy rate reached 26.59 percent in 2023, compared to 24.75 percent one year prior, the outlet reported.
—Quinn Donoghue
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