Chicago’s River North trade area vacancy rate dropped to 16.96% in 2022, down from 19.13% in 2021. River North bucked the trend of its Loop and Magnificent Mile neighbors with this improved market condition. Noah O’Neill, principal of Stone Real Estate Corp and co-author of Stone Real Estate’s River North Retail Analysis, sees the area’s broad customer base as one of the key foundations to its success. “River North offers ground level users a diverse customer base 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” stated O’Neill. The trade area’s vacancy rate dropped more than 5 percentage points since Covid, which belies the strength of River North’s retail market in the face of adversity, notes O’Neill.
O’Neill and John Vance, also a principal at Stone Real Estate Corp. and co-author of this Analysis, view restaurants as the primary contributor to the area’s vitality. O’Neill sees a snowball effect with restaurants in this neighborhood, as the robust food and beverage scene attracts more customers to the area and in turn, more customers to the area generates the high sales volumes enjoyed by many of the area’s other restaurants. “All of the significant Chicago-based operators have a River North operation. Obviously, Lettuce Entertain You has long been the leader, both in tenure and number of concepts. More recently, Ballyhoo Hospitality has entered the market at One Chicago Square, BOKA has opened Le Select and is re-concepting in its former GT Fish & Oyster space and Boston-based Legal Seafoods and London-based Hawksmoor Steakhouse have signed leases to enter the fray,” continued O’Neill.
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 2021 is as follows:
• Total of 3,434,168 square feet within 695 storefronts;
• 656,855 vacant square feet for a vacancy rate of 19.13 percent measured by square footage;
• Restaurant and Entertainment concepts occupied 1,343,665 sf for a 39.13 percent occupancy measured by square footage;
• The Design and Art Gallery category occupied 347,030 sf for a 10.11 percent occupancy measured by square footage.
• Total of 3,457,699 square feet within 706 storefronts;
• 586,894 vacant square feet for a vacancy rate of 16.96 percent measured by square footage;
• Restaurant and Entertainment concepts occupied 1,335,235 sf for a 38.62 percent occupancy measured by square footage;
• The Design and Art Gallery category occupied the same square footage of 347,286 sf for a 10.03 percent occupancy measured by square footage.
Cannabis dispensaries have leased two large, notable buildings; one at the former Rainforest Café at Clark & Ohio and the other at the former Carson’s Ribs at Wells & Ontario. Due to their size and prominent corner locations, these two new entries to the market will hold a distinct presence in the overall trade area. Notably, these non-food operators took advantage of River North’s two most distinguishable and positive attributes for ground level users; the availability of freestanding buildings and the opportunity to install eye-catching signage.
Ground level users covet locations where they are the sole occupant because they can fully control the branding message to the customer. The intersection of Clark & Ontario provides four examples of this scenario. The full block McDonald’s location is the most prominent example in River North, which comes with the added bonus of a full parking lot and ability for a drive-through in the heart of downtown Chicago. Smaller, but still extremely prominent, is Portillo’s across the street which also boasts a drive-through. Walgreens has a less visually prominent building, but its parking lot and drive-through capability provide tremendous convenience to its customers. The Hard Rock Café has the most creative sign of the four with its flashy electric guitar sign. Other freestanding retail locations close to this intersection are the aforementioned cannabis user taking the former Rainforest Café space and Tao at the northwest corner of Dearborn & Ontario.
Other sole occupants in River North include Harry Caray’s, Pizzeria Uno and Due, Fogo de Chao, True Food Kitchen, Rosebud, Room & Board and Ikram with her dramatic red façade. All of these stand-alone occupants enjoy a distinct presence in a trade area and are able to stand out in a neighborhood filled with tall buildings.
River North also provides the opportunity for traditional retail spaces to express their unique identities with non-traditional signage. A small, nondescript in-line building at 16 W. Ontario gets instant recognition with Chicago’s favorite redhead winking at you from The Redhead Piano Bar. The first-time visitors to Quartino immediately know that they will drink wine as they see the large vertical wine bottle installed at the corner of State & Ontario. The colorful vintage neon lettering of LaSalle Flowers along with its intricate design of the red rose draws the customer into a store that opened in 1936. And the two large Weber Grills hanging above the Weber Grill restaurant point the way to a meal which will actually be grilled.
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.