- Magnificent Mile retail availability dropped to 18% in Q2, from about 22% a year earlier and over 30% after the pandemic, per Newmark Research.
- Brands including Aritzia, Uniqlo and Chase are taking large spaces, and 80% of available space sits in three properties already being repositioned.
- Newmark’s Keely Polczynski expects ground-floor rents to move from the low-to-mid $300s toward the $400s per square foot as vacancy falls to the mid-teens.
Chicago’s Magnificent Mile retail market is moving from recovery to repositioning, says Keely Polczynski, a senior managing director at Newmark.
As of Q2, 18% of the space was available, per Newmark Research. That compares with roughly 22% a year earlier and a post-pandemic high north of 30%.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Demand Is Broadening
Aritzia, Uniqlo, Chase and American Eagle’s Aerie and Offline are signing big-footprint deals. Candy Hall of Fame took 60,000 square feet at 830 N. Michigan, the largest lease by size on the corridor since 2015.
Polczynski notes that about 80% of what’s available sits in just three properties already being repositioned. Asking rents are 24% below 2019, citing Stone Real Estate.
Retailers are also reshuffling within the corridor. Nike is relocating to 540 N. Michigan, and Gap is searching for a new home after leaving 555 N. Michigan. Polczynski says much of the activity is new or returning names such as LEGO, Charles Tyrwhitt and the Harry Potter Shop, not just tenants swapping addresses.
Buyers Are Pricing It In
Her team has advised on sales including 919 N. Michigan ($64.5M) and 500 N. Michigan ($41M), with more in progress.
Landlords are spending too. Pacific Life plans a $40 million renovation at the Shops at North Bridge, where Nike is moving into a 28,000-square-foot corner, and Water Tower Place is undergoing a $200 million overhaul.
Rethinking Big Boxes
After Nike leaves 669 N. Michigan, the question is whether one retailer takes all five floors or the building splits. Both approaches are playing out.
Ground-floor rents now sit in the $300s per square foot on a triple-net basis, with upper floors at a fraction of that. That leaves room for fitness, beauty and dining users, and Levi’s took just two floors so its landlord could seek another national tenant above.
Why It Matters
This tracks a recovery CRE Daily followed last October. Our Chicago retail revival brief reported The Wall Street Journal’s finding of roughly 25% vacancy and rents down 24% since 2019, with Aritzia taking 46,000 square feet and Uniqlo returning at about half its former size.
Since then, leasing has broadened and sales have followed, and Newmark’s own count now shows availability at 18%.
What’s Next
Polczynski sees ground-floor asking rents rising to around $400 per square foot within a few years, with vacancy drifting toward the mid-teens. She cautions that large vacancies take time to absorb and the recovery will be uneven by block.
Her read for owners: act during this reset, because those who wait may face more competition.
