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In challenging times, Chicago's Mag Mile retail rents stay among North America's highest

Ryan Ori, Chicago Tribune on

Published in Home and Consumer News

Chicago's other high street destinations also saw rents remain flat from the 2016 report, with Oak Street averaging $375 per square foot and State Street at $175.

North Michigan Avenue rents are likely to remain flat or fall slightly over the next year, based on leasing activity in the market, Jacobson said. Online retailers, which already have been adding shops in areas such as Lincoln Park's Armitage Avenue, could pick up some of the leasing slack on Michigan Avenue, Jacobson said.

While there are a smaller overall number of prospective tenants touring Mag Mile spaces, and some vacancies are taking longer to fill, some of the best-known consumer companies are filling the void with spectacular showrooms, Jacobson said.

In 2019, Seattle-based Starbucks plans to open its largest coffee shop in the world, a four-level Roastery flagship, in a building that is currently leased to Crate & Barrel at Michigan Avenue and Erie Street. Starbucks Executive Chairman Howard Schultz told the Tribune in April that he envisions Roastery shops such as the one coming to Chicago as "the Willy Wonka of coffee."

In another deal that's already affecting the market, Apple recently moved its Michigan Avenue flagship south to a glassy new building along the Chicago River. The deal is likely to continue a gradual southward push of retail toward Millennium Park south of the river, Jacobson said.

The new Apple store is just feet from Tribune Tower, where developers CIM Group and Golub & Co. are planning a major redevelopment that is likely to create new retail space along the north bank of the river.

 

That redevelopment, as well as Apple's recently vacated store a few streets north, will create new flagship opportunities.

"In addition to sales, Michigan Avenue flagships are a branding exercise," Jacobson said. "Tourists and locals go there to have experiences they can't get other places."

(c)2017 Chicago Tribune

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