John Vance, Stone Real Estate Principal, Provides Insight to CBS2 Chicago on State Street Vacancy

State Street downtown has highest vacancy rate ever, but experts say there is hope

CHICAGO (CBS) — State Street is a cultural anchor, a shopping destination, and an important part of Chicago’s history.

The Loop stretch of State Street has had its ups and downs – in the late 1970s, it was turned into a pedestrian mall and bus-only route in an effort to counter the effects of residents and businesses fleeing to the suburbs. In the 1990s, this was reversed, and the downtown stretch of State Street was revitalized with a new hybrid of retail, office buildings, entertainment, education, and culture, the Chicago Loop Alliance notes.

The 1922 classic “Chicago (That Toddlin’ Town),” written by Fred Fisher and famously covered by Frank Sinatra in 1957, makes reference to “State Street, that Great Street,” where “they do things they don’t do on Broadway.”

But right now, State Street has seen better days. The storefront vacancy rate on the Loop stretch of State Street is higher than ever before – as the downtown area tries to make a post-COVID comeback.

“Fifty percent of the storefronts on the east side of State Street are vacant,” said John Vance, principal at Stone Real Estate. “There is a palpable; a visible vacancy on State Street.”

It is especially noticeable between Monroe and Adams streets – the block that belongs to the iconic Palmer House Hilton.

“From Monroe to Adams, every single storefront is vacant,” said Vance. “So when you’re walking on that block, there’s just so much empty space – which then has this effect of hindering leasing.”

Meanwhile, Old Navy at 150 N. State St., at Randolph Street, closed last year. The space also remains vacant.

Vance said short-term leases, or “activations,” for retail or art galleries could make a major difference.

“Especially when we’re dealing with a lot of dark storefronts, turn the lights on,” said Vance. “Get someone in there. Make it feel energized.”

Michael Edwards, who leads the Chicago Loop Alliance, said that is a conversation they’re having with the city right now.

“To activate those storefronts through art and culture; through artists’ studios – temporary space to kind of bridge us between where we are now and standard retail that probably won’t be here for the next 18 months,” Edwards said.

Edwards also mentioned the summertime Sundays on State festival, which he said “really drives business activity down to our commercial corridor.”

Other revitalization efforts are happening all around State Street. Just this week, JPMorgan Chase – one of Chicago’s larger employers – unveiled plans for a major investment in the Chase Tower.

“I’m a believer that it comes back,” said Vance. “State Street needs smaller wins – smaller wins to get momentum to the big win of really, ‘Great, retail is back.'”