Trump Fumbled Chicago Real Estate Swipe

Donald Trump took to Truth Social to blast Chicago’s retail market, pointing to the “Miracle Mile” as evidence. Trouble is, he got the name wrong. It’s the Magnificent Mile, and his other facts weren’t much sharper.

In a now-viral message posted shortly before midnight, the president confused the name of the Windy City’s famous shopping corridor with a stretch of retail in Los Angeles, and painted a bleak picture of urban decay that’s out of step with reality.

“The Miracle Mile Shopping Center in Chicago, once considered our Nation’s BEST, now has a more than 28% vacancy factor, and is ready to call it quits unless something is done about the murder and crime, which is prevalent throughout the City,” the 79-year-old president said on the platform. “CALL IN THE TROOPS, FAST, BEFORE IT IS TOO LATE!”

The vacancy rate on the Mag Mile is about 25 percent. And that has come down from 30 percent two years ago. It’s unclear why President Trump chose now to post his critique.

The White House didn’t immediately return a request for clarity on Trump’s social media post.

Yes, there’s been some deals for office towers on the Mag Mile that fell apart or traded at dismal prices. See billionaire Neil Bluhm’s struggle to sell 401 North Michigan Avenue, and Connecticut-based developer Commonwealth’s plan to convert 500 North Michigan into housing after buying the 24-story building for just $5.1 million.

More to the president’s point, there was a high-profile smash-and-grab incident at the Mag Mile’s Louis Vuitton store at 919 North Michigan that led to a fatal car crash in August, when 40-year-old Mark Arceta was killed by one of the alleged perpetrators speeding through the intersection of Michigan and Ohio Street. Arceta’s partner was reportedly due to give birth the next day, according to Block Club Chicago reporting.

There’s no argument that the commercial property market is in rough shape right now. Murder charges have been filed in connection with the tragedy. Yet it’s not clear whether that incident or another prompted Trump to chide the city.

Furthermore, retail crime in the Chicago Police Department district including the Mag Mile has dropped by 4 percent year-over-year, and foot traffic is returning, according to a recent report by on-again, off-again Trump ally Rupert Murdoch’s Wall Street Journal. Meanwhile, the commercial vacancy rate is improving as landlords recalibrate rents to today’s more sober expectations, giving new tenants a shot at prime real estate without the pre-pandemic sticker shock.

Plus, developer AMLI Residential in September unveiled plans to build 498 rental units with nearly 27,000 square feet of retail within a 56-story skyscraper at 669 North Michigan — that type of investment usually doesn’t occur on commercial corridors that require the National Guard to come in and clean up, as Trump suggested the Mag Mile does.

It’s true that prime shopping strips in other cities, such as Rodeo Drive in Beverly Hills and Fifth Avenue in New York, have had their vacancy rates drop below pre-pandemic levels.

Chicago’s Mag Mile has seen an uptick, however. It comes as property values on Michigan Avenue have corrected from their overheated pre-Covid peaks. Retailers who might have once balked at Mag Mile premiums are starting to jump back in, enticed by more reasonable rates and stabilized street conditions. The area isn’t back to its old glory — several flagships remain dark — but it’s not the retail graveyard Trump implied either.

Ironically, Trump’s own tower is just a block west of the Mag Mile’s base, so he should know the corridor’s name. It’s understandable, though, why he might be personally frustrated with the city’s retail market. The Trump International Hotel and Tower has long struggled to lease its 70,000-square-foot retail space fronting the Chicago River. The Trump Organization earlier this year hired Newmark brokers to try to finally fill the space, which has sat largely vacant since the building opened over a decade ago.

The Newmark team said there’s momentum at the Trump Tower space, however, and pointed out some positive signs for the proximate Mag Mile. “We’re currently in active discussions with a number of prospective tenants, including a 2,800-square-foot space that’s out to lease, as well as several larger restaurant and entertainment concepts,” James Schutter of Newmark said in an email, without mentioning details of the Trump Tower deal in the works.

He did mention several factors propelling the Mag Mile’s rebound, though. Among them are lines out the door for the recently started Harry Potter store, Aritzia opening in a former Gap shop and fellow apparel retailer Uniqlo returning to Michigan Avenue after closing a different store in 2021. And there’s a $50 million investment into a magic-themed, adults-only theater called The Hand & The Eye going into the Mag Mile at 100 East Ontario Street.

“I don’t see Mag Mile’s vacancy challenges to be unique to Chicago — most major urban retail corridors have been through a period of adjustment since the pandemic,” Schutter said. “Typical of the Midwest’s conservative nature, it’s just a slower return to normalcy, but it is a return. We’re seeing entertainment and experiential concepts increasingly filling spaces on the Avenue, and pricing has adjusted as property values have receded somewhat from pre-Covid highs.”

The broader picture in downtown Chicago is one of slow but measurable recovery. Shopping strips such as Armitage Avenue and the Southport Corridor are practically bursting at the seams, nearing fully occupied. Office-to-residential conversions are getting city support, tourism is rebounding and developers are repositioning older assets. The commercial core is no longer in freefall, despite political talking points that say otherwise.

Property values remain below their pre-pandemic highs, but the fact they’re starting to trade hands, even at depressed prices such as Ketu Amin’s recently struck $72 million purchase for a Westin on the Mag Mile, is a sign of the market functioning the way it’s supposed to when in need of a reset.

Trump’s misfire may score him clicks, but real estate insiders watching the Mag Mile know better: the market’s showing signs of life.