Low Vacancy Rates Enliven the Loop
- May 25, 2011
A new report by Baum Realty Group shows that retail vacancies in Chicago’s downtown district fell to 6.9 percent in 2010, from 8.3 percent in 2009, and the figures are expected to reach even lower rates in 2011.
The increase in residential population and number of tourists in the Loop is mainly due to the influx of banks, restaurants and shops that encouraged consumers to spend more money again. The average asking rent in 2010 was $54.10 per square foot, an increase from $53.91 registered in the previous year.
Seventy-two new leases were signed in the Loop in 2010, more than half of them accounting for restaurants. Downtown also received nine specialty stores, seven banks, six cellphone shops and five apparel stores. The beginning of 2011 continued bringing retailers in the area. One of the first deals was signed by Target Corp., which is set to open a small store at the Sullivan Center in 2012. Also, Wal-Mart Inc. plans to open a small grocery store at the Presidential Towers apartment community in the West Loop by the end of 2011. The new clothing stores include Eileen Fisher, American Apparel, Jos. A. Bank and Paul Stuart.
The Chicago Loop Alliance, an organization that represents downtown businesses, plans to install more lights on State Street to make the shopping strip more attractive after dark. According to Ty Tabing, the organization’s executive director, 14 landscape planters along the strip from Wacker Drive to Congress Parkway will be equipped with strings of decorative LED lights that will change color and configuration depending on the time of year.
Downtown Chicago residential vacancy rates have decreased as well, with many residents of the Loop choosing to rent instead of own. According to Appraisal Research Counselors (ARC), property managers took this opportunity to raise rents to an average of $2.29 per square foot in the first quarter of 2011, up 2.7 percent from the fourth quarter of 2010. ARC also notes that downtown Chicago has currently 5,226 more renters than it did in the first quarter of 2008, which represents a 35 percent increase in demand.