Shoppers on North Michigan Avenue, June 22, 2010. (Abel Uribe/Chicago Tribune)
The Magnificent Mile is emerging from the recession like most of America: Less bling and more bargains.
North Michigan Avenue is on the mend, thanks to the arrival of off-price stores and discount chains that are moving into large swaths of space, some of it empty for years.
The pending arrival of off-price stores Nordstrom Rack and TJX’s HomeGoods, combined with the 2009 openings of fast-fashion clothing store Zara and electronics giant Best Buy, helped lift the boulevard to its best performance since 2003, according to an annual retail vacancy survey from real estate firm CB Richard Ellis Inc. provided exclusively to the Tribune.
“The Mag Mile, in order to survive, has to reflect the shopper’s mindset,” said Candace Corlett, president of WSL Strategic Retail, a New York-based consumer behavior research firm. “It’s a different type of magnificence.”
The vacancy rate on North Michigan Avenue dropped to 3.6 percent for the year ended May 31, its lowest level since 2003, when it was 3.1 percent, according to the CBRE report. The vacancy rate had soared to 7.2 percent in 2009 and 6.3 percent in 2008 — the two worst years since the early 1990s recession, the report said.
At the same time, the average asking rent rose 0.7 percent to $83.26 per square foot, the highest rate since $113.68 in 2002 — a sign that the famous shopping street is holding its own as a destination for merchants and shoppers. The report tracks the 3 million square feet of retail space between the Chicago River and Oak Street.
“We’re starting to see these big blocks of space that were among the first victims of the recession being absorbed back into the retail inventory,” said Bruce Kaplan, senior vice president of brokerage services at CBRE in Chicago and author of the report. “It speaks to the underlying strength of the street.”
Even in the worst of times, Michigan Avenue did substantially better than the rest of the nation, Kaplan said. The national retail vacancy rate was 12.5 percent in the first quarter of 2010 compared with 12.1 percent in the first quarter of 2009, according to CBRE.
Mag mile on the mend thanks to lower priced stores? No. I don’t want to think TJ MAXX on the mile. The mile was upscale and was a REASON to go downtown. Now? Oakbrook. Free parking, better stores, cleaner, no bums, lower taxes, and a better way to spend an afternoon walking around.
Speak for yourself, whof lungpoo, but as a city dweller with no car having a store like Nordstrom Rack and ESPECIALLY HomeGoods just a few blocks from me is exciting!
I for one am glad to see some diversity in the shopping downtown. High end stores are great for the tourists but don’t do much for the city dwellers that need to shop for household items and everyday clothes. Some of us would rather shop online than have to trek out to the culture voids of Oakbore, Nappervile, and Shclumburgh. Hooray for us! I have a reason for the first time in years to actually shop there. You’ll be seeing more of my $$.
What kind of math is it to say that rent of $83 per square foot today is “holding its own” with a rent of $113 per square foot 7 years ago?
Last time I checked my interpretation synapses, “holding its own” means at, or above the last amount…especially after 7 years of expected annual increases.
Who wrote this story? The North Michigan Avenue Merchants Association?
Is there anything open in Chicago Place?
I agree with Cheryl. What if anything is open in Chicago Place? I think it is completely DEAD. Does that open space count towards the vacancy rate on Michigan Avenue? That was the worst planned mall ever. What will they be doing with it?
Who is the that foxy looking woman in the pink top in the photo?
I thought there was a Nordstrom’s Rack on State Street.
How about an Off 5th, or Neiman’s Last Call? How about Top Shop? CB2? A Dean&Deluca would be nice.
I get tired of seeing the same stores duplicated over and over again Sephora, Sephora, Filenes, Filenes , Forever 21, blah, blah, blah
@whof lungpoo – spoken like a true suburbanite. BTW, your “downtown” is out in the suburbs, it’s not Chicago.
The Magnificent Mile is being junked-down like the rest of the USA.
The Magnificent Mile has not been “magnificent” in decades. When the classic three and four story buildings were torn down to put up ugly glass towers, it sealed the uglification of North Michigan Avenue.
The worst and one of the first examples of horrendous architecture was of course the Marriott Hotel on Michigan Avenue. What used to be a classy street has gone downhill and degenerated into a mass merchandising mall for tourists from Des Moines.
Welcome to the Magnificent Suburban Mall.
suburbs or downtown . . . . . all of you people around Chicago are too picky . . . . you want a grocery next door . . . . no you don’t want a grocery next door . . . . get with it
rmk/akron
Oh, what the “Mag Mile” used to be! Who can remember Diana Court and all the interesting and unique shops and bookstores?
The currant “mall-ization” of Michigan Avenue may bring good bargains to shoppers and tourists but to think of what it once was!
Not just Chicago. It is America. New York is the same way. They want every city to look like the same city.
what kind of idiot travels into the city to buy junk they could get in the suburbs for way less money? No wonder Americans are in such financial trouble. They go out of their way to spend more. Stay in the burbs and pay less to shop, eat and park.
Oh my, Lars is sooo clever.
Magnificent Walmart!
[[Trisha Today at 4:51 pm Who wrote this story? The North Michigan Avenue Merchants Association?]]
…yes.
I agree with Tracey—an Off 5th or Last Call would be nice…
ColdWar Vet
I agree – only idiots travel into the city to shop at stores that they have in the suburbs. It could be that they also want to see the cultural attractions and dining experiences that few suburbs have to offer. Of course I’ll never understand what idiots move out to Schaumburg and Naperville. Coming downtown to shop is a much smaller and forgivable mistake.
Tracey – I agree. I was so disappointed by a recent NY trip. The restaurants in Times Square were Applebees, Olive Garden, TGIF, and Chili’s. I felt so sad for our country when one of our most visited and culturally significant locations offered the same fair as any mall in America. I will say that once you got away from the tourist traps great food was everywhere. Only wish Chicago could figure out a way to allow food carts on the streets. The food from the street vendors was awesome!
Chicago Place closed within the last year, it was all empty retail space. A place that big lying fallow pushed the percent up, Now its no longer considered retail space and the percent goes down. I hope nobody is paying attention anyway, this is obviously a piece planted by Sammy Zell and CBRE to keep values at a level that benefits them.
Hank, your conspiracy theory proves how clueless you are, just like most of the people who post on here. Chicago place is closed and I believe most of it is being renovated and turned into office space with the ground floors to remain the only retail.