Gap Eyes Chicago Magnificent Mile Comeback

Half a decade after retreating from Chicago’s most famous shopping strip, Gap is plotting a return to the Magnificent Mile.

The San Francisco-based apparel chain is in advanced talks to lease 8,325 square feet at 700 North Michigan Avenue, according to CoStar News. The deal isn’t finalized and could still fall apart, but if completed it would mark a symbolic comeback for a retailer that once anchored the corridor with a three-level flagship at 555 North Michigan.

Gap’s prospective new home is a former T-Mobile space at the base of a 49-story residential tower at 100 East Huron Street. The building’s other retail tenants include Saks Fifth Avenue and Zara. New York-based Ashkenazy Acquisitions and Aurora Capital Associates own the property.

In September, the joint venture had to pay $65 million to lender Aareal Capital Corporation in order to keep the retail spot known as the Chicago Place Mall, according to property records. As previously reported in The Real Deal, Aareal in turn extended a new $33 million senior mortgage loan against the 300,000-square-foot property.

The move would add to a string of recent leases along the one-mile stretch of North Michigan Avenue, which has been clawing back from pandemic-era vacancies and unrest. Availability is projected to fall to 23.5 percent by the end of 2026, down from a peak of 33.9 percent early last year, according to a Kirsch Agency report cited by CoStar.

Gap would be the latest boomerang tenant. Spanish retailer Mango and Japanese fashion brand Uniqlo have also committed to large new spaces after previously exiting the avenue. Aritzia backfilled Gap’s former flagship, while a Harry Potter-themed store, Alo Yoga, Intimissimi and Falconeri have all inked deals in recent leasing cycles.

The contrast with early 2021 is stark. Gap shuttered its store at 555 North Michigan in January of that year, part of the San Francisco-based parent company’s nationwide plan to close 350 Gap and Banana Republic stores. The exit came as Michigan Avenue tourism stalled during the pandemic, and retailers grappled with waves of property damage and theft following the murder of George Floyd. Macy’s also closed its Water Tower Place anchor around the same time.

Plenty of hurdles remain for a full comeback in the shopping corridor, including stubborn vacancies at Water Tower Place and the Shops at North Bridge.

— Eric Weilbacher