The Loop retail market improved slightly in 2024 as the vacancy rate decreased to 29.78%, down from 30.13% in 2023. As we approach the fifth anniversary of Covid, we can now analyze what occurred during the 5 year period after the March 16, 2020 shutdown. Since the shutdown, Loop retailers have vacated 222 storefronts consisting of 660,000 square feet of retail space. As the Loop visitor walks the Loop today, the pedestrian experiences an environment where one out of three storefronts are vacant, as there are now a total of 449 empty storefronts within the inventory of 1,307 storefronts. That represents 1,327,508 vacant square feet within the total inventory of 4,467,370 square feet of ground level space. The categories which vacated the most square footage are as follows:
Fast Casual Restaurants vacated 153,000 square feet as Loop mainstays like Corner Bakery, Sopraffina, Hannah’s Bretzel and Market Creations closed several of their outlets while Specialty’s Bakery and Dos Toros left the market entirely.
Fast Food Restaurants vacated 101,000 square feet as the Loop worker gravitated to Fast Casual Restaurants for meals. When Google started its renovation of The Thompson Center, 10,000 square feet of fast food in the building closed. Additionally, McDonald’s continues to reduce its Loop footprint from pre-Covid to now.
Apparel vacated 104,000 square feet, predominately from LaSalle and State Streets. Brooks Brothers, Ann Taylor and Ann Taylor Loft ended their decades long presence within the LaSalle Street Corridor and State Street endured various store closures, including Old Navy, Crocs, Lids, Aldo Shoes, Naturalizer and A’gaci.
Financial Services vacated 87,000 square feet as Citibank, Bank of America, PNC and Chase shuttered various bank branches.
Pharmacies closed 65,000 square feet of stores as the reported closings by Walgreens and CVS included some Loop stores.
Office Supply stores shuttered 46,000 square feet, as FedEx, The UPS Store and local print shops closed.
Salons & Sundry closed 17,000 square feet of stores, a relatively small amount of square footage. These users are particularly missed, because they were part of the daily fabric that Loop retailers created for the personal experience of the Loop worker.
Somewhat surprisingly is that the full service restaurant and coffee café categories have maintained stable occupancy levels. Full service restaurants occupied 436,000 square feet in 2019 and increased to 447,000 square feet in 2024, while the coffee café category occupied 134,000 square feet in 2019 and 132,000 square feet in 2024. This highlights the importance that office building landlords place on these categories as amenities to their office tenants and have therefore worked to keep these providers operating in their buildings. Additionally, the costs to install new restaurant mechanical, electrical and plumbing components (MEPs) to operate these food and beverages establishments are so high that landlords are often financially better served keeping the existing operator rather than go through the process and expense of bringing a new operator into the space.
MICHIGAN AVENUE CORRIDOR (bounded by the Chicago River to the North, Ida B Wells Drive to the South, Lake Michigan to the East and the east side of Wabash to the West)
This submarket had a slight decline in the vacancy rate from 28.18% in 2023 down to 27.78% in 2024. Michigan Avenue storefronts attracted two cafes primarily catering to tourists across from The Art Institute and two fast casual restaurants signed leases for spaces across from The Bean.
CENTRAL LOOP (bounded by the Chicago River to the North, Ida B Wells Drive to the South, the west side of Wabash to the East and the east side of Clark Street to the West)
This submarket also had a slight decline in the vacancy rate from 26.59% in 2023 down to 26.06% in 2024. Gap Factory Store’s lease signing to replace the shuttered Express store at 17 N. State is significant on several different levels. First, this lease generated a win for a street that needed some good news. Secondly, the lease avoided an increase to the street’s already high vacancy rate. Third, the deal solidified a value-oriented apparel co-tenancy to the existing lineup of similar stores like Primark, Zara, Uniqlo, Nordstrom Rack, Banana Republic Factory and Ann Taylor Factory. Fourth and most importantly, this new lease will hopefully spark leasing momentum, much like what occurred on The Magnificent Mile when Alo Yoga signed its lease at 717 N. Michigan Avenue. State Street needs more retailers to reconsider the street and the Gap lease should cause other retailers to take a fresh look at State Street.
LASALLE WACKER CORRIDOR (bounded by the Chicago River to the North, Ida B Wells Drive to the South, the west side of Clark Street to the East and the Chicago River to the West)
Little retail activity occurred in this long-struggling section of the Loop and the vacancy rate remained at just over 36%. On the positive side, Google’s construction of its building tangibly shows Google’s commitment to people working in the office, which will bring back some of the density lost on LaSalle Street. Additionally, the upcoming conversions of some of the office buildings to residential will extend the retail shopping hours into the early evening and weekends when residents occupy the buildings. Still several years away, but the news of the conversions portends what the future could be for this corridor. Additionally, the solid office leasing in Class A office buildings along Wacker Drive will increase the density of well-healed office workers to this area which should lead to higher retail sales for the various food & beverage concepts along Wacker Drive as well as the main east/west streets from Jackson to Randolph.
WEST LOOP (bounded by the Chicago River to the East, I90/94 to the West, the south side of Lake Street to the North and Ida B. Wells Drive to the South)
The vacancy rate for this West Loop trade area increased dramatically from 25.04% to 28.13%. Much of the vacancy stems from office type uses who had previously occupied ground floor spaces and have now vacated them due to WFH.