City is full of opportunities.

by admin

Chicago, the nation’s third-largest metropolitan area, is known as a legendary shopping destination. Occupying a glamorous stretch along Chicago’s Michigan Avenue, the Magnificent Mile is lined with fabulous shops, exciting sightseeing activities, restaurants, luxury hotels and even flagship boutiques for some of the world’s most luxurious brands.

But the Windy City, like most of the nation, remains mired in a depressed real estate market and faces the worst slump in retailing growth in at least a decade. Vacancies across the Chicagoland market have increased and are currently hovering between 10 and 12 percent. But because the city is so large, there are varying degrees to which areas are affected.

The outlying suburbs, where clusters of homes sprouted from farm fields just as the recession began, seem to be faring worse than the downtown area and the more densely populated suburbs. Retailers are taking advantage of the current conditions and many are leaving the “green,” suburban areas and repositioning within the city or upgrading their locations if they already have an urban presence.

In the city proper, a massive new Barneys New York emporium opened its doors earlier this year. The 90,000-square-foot store occupies a new six-story building on the corner of Oak and Rush streets in Chicago's fashion district, replacing the retailer’s existing 45,000-square-foot unit located directly across the street. Additionally, electronics retailer Best Buy took more than 35,000 square feet of prime first-floor space in the famed John Hancock Center, and the third-largest Whole Foods store in the world opened this year in Lincoln Park. The new 75,000-square-foot grocery store, located at Sheffield and Kingsbury, is more than double the size of the Whole Foods store it replaced.

The Loop and inner neighborhoods have even seen new retailers enter the market. Restaurant concepts like Five Guys Burgers and Fries, Jersey Mike’s Subs and Happy’s Pizza have opened multiple stores throughout the city. Early next year, Grand Rapids, Michigan-based Meijer plans to debut a 104,000-square-foot store in the northwest suburbab of Niles.

Chicago has faced its share of adversity, but relative to other markets, Chicago has been more sensitive to oversupply. Despite the difficult economic times, vacant storefronts in top locations are still attracting interest from retailers. Chicago will continue to allure residents, employees and tourists – all of whom generate foot traffic – and with rent prices at the lowest level since mid-2007, now is an ideal time for retailers to move back to the city.

— Stan Bobowski is an X Team International partner and President of Bobowski & Associates in Chicago.

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