CHICAGO (WLS) — The I-Team has been following the struggles on Michigan Avenue and the Loop since the COVID-19 pandemic.
Now, about three years since our first report, the Loop Alliance says pedestrian traffic is skyrocketing. Still, many storefronts are empty, and we wanted to know what’s being done to fill them.
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There are plenty of people packing the streets on Michigan Avenue and in the Loop. In fact, the Loop Alliance says foot traffic has skyrocketed in recent months.
“One-point-five million pedestrian impressions on State Street for an average week,” said Chicago Loop Alliance President and CEO Michael Edwards.
In some cases, pedestrian activity is hitting pre-pandemic levels, which has people like Loop resident Brooklyn Scott are wondering why more businesses aren’t coming back as quickly.
“Come to the Loop, it’s like kind of surprisingly a little empty, which I thought would be the opposite, being this is like the main heart of downtown. It’s kind of empty,” Scott said.
In this area on State Street near Monroe, you can see a string of empty stores with paper on the windows.
“I just like, I see lost opportunity, like there’s so many stores I could come in here, even just a small pop-up market for small businesses to come host something here, because there’s so many things that could happen here,” Scott said.
“I think it’s pretty sad for like the tourists or the business people working here, who want to grab lunch during lunchtime, so I think people want to see a more vivid downtown area,” said tourist Charles He.
According to the latest vacancy rate data from Stone Real Estate, the Loop faced a fourth-straight annual vacancy rate increase in 2023, jumping to more than 30% vacant. In fact, vacancy rates have doubled from the pre-COVID levels of only about 15%.
“But we’re seeing all the people, so why don’t the businesses want to be here?” asked ABC7 Consumer Investigator Jason Knowles.
“Well I think, I think there’s an information problem that people got sort of a negative feel for what’s going on in the Loop, and it’s up to us and groups like us to convince the investors that there’s a dollar to be made here, and they’ll come back,” Edwards said.
Edwards said there are efforts to fill some of the vacant storefronts with art and fashion pop-ups until permanent retail finds its way back.
“The pandemic certainly changed behavior, where people shop, what they shop for, what kind of merchandise they’re looking for has changed a lot and state street hasn’t been able to keep up with that So the prices of renting real estate down here are still pre-pandemic levels or approaching pre-pandemic levels,” Edwards said.
That’s right, Edwards says the problem is many of the rent prices haven’t changed much since 2019. He and other experts say landlords are waiting to see if stores will eventually pay those same rent prices. In many cases, a landlord’s bank lenders won’t allow them to lower the rent or the landlord needs a certain dollar amount to cover property taxes and expenses.
Another option is for building owners is to sell. Stone Real Estate says one empty section of stores on North Michigan Avenue was recently purchased at a reasonable price, which means new owners could offer lower rents.
John Vance from Stone Real Estate says it is one example of progress on Michigan Avenue.
“And so, that new ownership group has a very good shot of leasing space to someone new, and that’s important for the avenue to get these spaces get these vacant spaces leased and occupied,” Vance said. “Michigan Avenue may have found some footing.”
Vance says newer clothing brands are taking over empty spaces, like athletic apparel store Alo Yoga, which opened late last year. Vance also points to Ralph Lauren renovating its store.
And there is more progress. The H&M will soon be leaving one North Michigan location empty, but it will be filling a space in the old Apple store, and up-and-coming clothing retailer Aritzia is taking over the former Gap space.
“Both are very deep in construction, and hopefully they’re able to open up before July 4,” Vance said. “It will just feel better, and feel and perception, and how the street, you know, kind of talks to the customer. That’s vital in in retail, and the avenue should have a better summer, because it will just feel better and look better.”
He says Paul Stuart, a men’s clothing store, opening in the former Hershey’s space also helped, and the former Lawry’s has been leased. Although, it’s unclear what is moving in.
The Mag Mile’s vacancy rate is slightly down from last year to about 26%, but when the I-Team first took a tour of the vacant store problem in October 2021, the vacancy rate on the Mag Mile was at a lower 19%.
Both Vance and Edwards say they believe the biggest challenge is getting retailers to commit to large spaces due to the popularity of online shopping.
“We don’t need these big spaces anymore, so people are trying to figure it out. Whether it’s an office building turning into a residence or these retail spaces that need to be shrunk to a smaller size.”
Both experts say some stores moved from downtown because they wanted a smaller footprint, going to other popular neighborhoods like the Gold Coast, Fulton Market and the West Loop. There are also efforts to fill empty spaces with more experience type venues and less shopping. The experts ABC7 talked to said crime could be a small factor but not a driving force behind a retailer deciding to reopen in the Loop or Michigan Avenue.
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