After dipping to a vacancy rate below 17 percent in 2022, retail vacancy increased to 17.11 percent in 2023 and then jumped to 20.47 percent in 2024. While the 2024 vacancy rate is high, a substantial portion of it was attributable to the 30,000 sf former Whole Foods space at One W. Superior. Now that Aldi has signed a lease for that space, the current rate drops to 19.60 percent, which we consider somewhat healthy for a trade area of this size.
River North compares quite favorably to other key trade areas with The Mag Mile’s vacancy at 25.48%, the Loop’s vacancy at 29.78% and Fulton Market’s vacancy at 20.74%. One of the reasons that River North has performed better than its surrounding neighbors is because of its broad customer base comprised of residents, renters, hotel guests, office workers and tourists. Restaurants have especially leveraged this varied and dense customer base to drive high sales volumes for many of the food and beverage operations in the neighborhood.
Restaurants play a key role in creating and maintaining the area’s vitality. A snowball effect exists for the restaurants in this neighborhood, as the robust food and beverage scene attracts more customers to the area and in turn, more customers generate the high sales volumes enjoyed by many of the area’s other restaurants. Further, all of the significant Chicago-based operators have a River North operation with Lettuce Entertain You as the established leader, both in tenure and number of concepts. More recently, several new to Chicago operators have opened in River North, including Boston-based Legal Seafoods opened at Marina Towers, London-based Hawksmoor Steakhouse on LaSalle Street and Chicago-based Ballyhoo Hospitality has entered the market at One Chicago Square.
Recently some closings have occurred on high profile corners, none more significant than Hard Rock Café ending its 40-year run. While difficult to see such a long-standing fixture in the trade area close, this stand-alone building with a significant outdoor area will attract a strong tenant ready to make a significant mark in Chicago. The other closures, which include concepts from Chicago-based Stefani group closed at Wells & Ohio and Jose Andres shuttering his Jaleo concept at Clark & Illinois, will also find replacements. These closures are considered positive as these locations provide an opportunity for relevant concepts to enter the market and revitalize these strong corner locations.
The boundaries for the River North Retail Analysis are The Chicago River to the South, Chicago Avenue to the North, Rush Street to the East and Orleans Street to the West. The comparative data to 2023 is as follows:
2024 DATA
- Total of 3,457,913 square feet within 708 storefronts;
- 707,733 vacant square feet for a vacancy rate of 20.47 percent;
- Restaurant and Entertainment concepts occupied 1,369,005 sf for a 39.59 percent occupancy;
- The Design and Art Gallery category occupied 334,337 sf for a 9.66 percent occupancy.
2023 DATA
- Total of 3,426,276 square feet within 704 storefronts;
- 586,155 vacant square feet for a vacancy rate of 17.11 percent footage;
- Restaurante and Entertainment concept occupied 1,405,975 sf for a 41.04 percent occupancy ;
- The Design and Art Gallery category occupied 325,236 sf for a 9.49 percent occupancy.
River North’s retail has performed better than its Magnificent Mile and Loop neighbors, because its broad customer base shielded it somewhat from the adverse effects of Covid and now Work from Home. With the gradual return of tourists and office workers to the area, adding to River North’s other existing customer base of higher income residents, the area has enjoyed a quicker rebound than other Chicago neighborhoods. With hospitality as the long dominant personality trait of River North, the continued influx of food and beverage operators supports a lively and energetic atmosphere so vital to Chicago’s downtown core. As The Magnificent Mile and the Loop commence their modest rebounds due to the gradual return of tourists and office workers, we see a continued strengthening of River North during the next several years.