For the second year in a row, The Loop’s retail vacancy rate decreased with a significant
drop to 28.53% versus 29.76% in 2024. Surprisingly, and perhaps a sign that a broader
recovery has commenced across the entire Loop, State Street and the long-suffering
Wacker & LaSalle corridors both reported significant increases in their respective
occupancy rates this year.
Several factors contributed to this year’s occupancy gains:
• Four large State Street leases;
• Two full service restaurant deals in office buildings along The Chicago River;
• Creative uses of vacant ground level spaces;
• First-to-the Loop fast casual restaurant deals at Willis Tower.
These gains nullified the closings of two Rosebud restaurants, two more McDonald’s
closings and further closings in the Pharmacy and Financial Services sectors.
State Street: The vacancy for State Street storefronts decreased from 35.08% to 28.82%
due to the significant Barnes & Noble lease at 150 N. State, Gap Factory Store at 17 N.
State the Downtown Islamic Center’s purchase of 213-227 S. State and the Board of
Elections voting facility relocating to 137 S. State. These were critical transactions as the
square footage absorbed offset the closing of Anthropologie at Block 37 and Saks Off Fifth
at 10 S. State. Despite these closures by apparel users, State State’s co-tenancy still
consists of a solid retail lineup including Zara, Sephora, Nordstrom Rack, Uniqlo, JD Sports,
Five Below, Target, the aforementioned Gap Factory Store and Barnes & Noble (opening in
2026). As the Loop’s predominant soft goods retail street, State Street plays an outsized
role in the health of the Loop’s overall retail market and its continued improvement is
needed for the entire Loop to regain its footing.
Full Service Restaurants: Full service restaurant leases at 1 S. Wacker and 222 N. LaSalle
highlight the continuing trend of office buildings improving their food amenity offerings to
retain and attract office tenants. 333 W. Wacker expanded its existing restaurant operation
to offer a more complete Food & Beverage (F&B) amenity to its tenants. At the other end of
the spectrum (and the Loop), Hello Kitty Café leased space at the London House Hotel to
capture the tourist traffic along Michigan Avenue’s Cultural Mile and the Riverwalk. And
One E. Wacker signed a lease with another restaurant user to replace McCormick &
Schmick’s. These lease signings were vital as they offset other restaurant closings,
including the longstanding 312 Chicago located across from the Google Center.
Creative Uses: Several office buildings creatively transformed their vacant ground level
spaces into non-retail uses which enhanced the feel of their lobby level environments.
Most notable is The Chicago Board of Trade’s conversion of the former Burling Bank space
into the CBOT Museum. Other buildings like 100-150 S. Wacker and 55 E. Monroe
transformed their retail vacancies into office tenant-amenity spaces.
Willis Tower & Fast Casual Restaurants: Willis Tower attracted CAVA, Mendocino Farms
and Van Leeuwen Ice Cream to its Catalogue redevelopment. These leases show that
expanding restaurants will open in the Loop if they see pedestrian traffic and density.
Obviously, the size of Willis Tower provides weekday density and the tourist attractions of
Skydeck Chicago and Color Factory drive weeknight and weekend traffic to the retail
portion of the building.
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)
The stalwart before and during Covid, this submarket experienced a slight uptick in
vacancy to 27.81% in 2025, slightly up from 27.76% in 2024. The street experienced
positive activity with the Portillo’s lease at 300 N. Michigan Avenue, Windfall Group
purchasing the vacant building at 174 N. Michigan to install its own restaurants in the
building and the aforementioned Hello Kitty lease at 360 N. Michigan. Unfortunately, CVS
closing at 300 S. Michigan negated the positive absorption on the north side of the street.
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)
In addition to the key leasing wins on State Street, Gap Factory Store opened at 17 N. State,
the operators behind The Museum of Illusions will bring another museum experience to
133 S. State, Momento Cantina at Wabash & Monroe opened to positive reviews and One E
Wacker quickly backfilled the former McCormick & Schmick’s space with another signature
restaurant.
LASALLE WACKER CORRIDOR (bounded by the Chicago River to the North, Ida B Wells
to the South, the west of Clark Street to the East and the Chicago River to the West)
The increased office density resulting from solid office leasing in this sector is generating
F&B interest along Wacker Drive. Additionally, the large and well-capitalized office
buildings in this corridor have the financial muscle to fund the necessary capital required
to build full service restaurants.
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 decreased from 28.13% to 26.81%. Much of
the decrease comes from The Illinois College of Osteopathic Medicine replacing Hillshire
Brands at 400 S. Jefferson, The Museum of Broadcast Communications filling the vacancy
at 165 N. Canal, Susu restaurant leasing the former Grace space at 652 W. Randolph and
some office leases occupying ground level spaces. Unfortunately, this trade area lost the
highly acclaimed Proxi, which closed on New Year’s Eve.