Major retailer returning to Chicago's Loop despite increase of vacancies since pandemic
CHICAGO (CBS) — Chicago's downtown has seen a record number of empty storefronts. One company's big bet, however, could be a sign that things are shifting in a better direction.
After the pandemic caused businesses to shut down, State Street and the Loop as a whole are still recovering, with nearly 450 storefronts still sitting empty. One of those fronts will become home to a returning major retailer, potentially giving the Loop a much-needed boost.
State Street has not been such a great street for retailers since the start of the pandemic, where one out of three storefronts in the Loop sits vacant. That's nearly double the pre-pandemic vacancy rate, with 222 storefronts closed and over 1 million square feet of empty retail space.
"2020 was extraordinarily dramatic and therefore traumatic because no one knew," said Stone Real Estate principal John Vance, who compiled and published the Loop retail market data.
Despite the high vacancy rate in the Loop, Vance said there's reason to be optimistic.
"The vacancy rate, which is high in the Loop right now, stayed relatively the same, which is tough because the vacancy rate is high, but there is a bit of good news because it's stable," he said.
Gap, which closed its Magnificent Mile store in December 2020, recently announced plans to open a factory outlet on State Street, potentially providing a spark to the Loop.
Vance said Gap's return to downtown is a very positive sign, and could be a test for other major retailers who might have been eyeing Chicago.
"There will be a question from other national retailers of, well, it's pretty extraordinary that Gap Factory store went on to State Street as an in-house retailer. Should I be looking at State Street because Gap just did it?" Vance said.
Vance said he says the perception of crime in Chicago is still a factor for some major retailers.
"National retailers – less so now, but there are still some of them – are still calling with like, 'What's the crime situation?' And that's perception, and not reality," Vance said.
At Colores Mexicanos along the Magnificent Mile, they opened their doors in 2021 due in part to the retailers that fled Michigan Avenue, during one of the bleakest times for retailers along the famed shopping corridor.
"After the pandemic, a lot of places in the city and along Michigan Avenue were empty. Fortune business has been very good for us since we opened our doors," said owner Erika Espinosa.
Espinosa said she is optimistic that her small family business is be here to stay.
"Fortunately for us, business has been very well since we opened our doors," she said.
Meantime, Vance said Google's construction of a new headquarters in the former Thompson Center building could be the shot in the arm the Loop so desperately needs.
