Conflicting Reports Agree at Least That Loop Retail Market is Tight

CHICAGO-Two reports on the retail market in Chicago’s Loop point to a tightening of that market, with rents generally up in 1999. But there was a more mixed picture of vacancy rates, with one report finding that vacancies were up overall, while another report–focusing specifically on the State/Wabash shopping corridor–found that vacancies were down.

According to Baum Realty Group’s “Loop Report,” retail asking rental rates in the Loop rose an average of 3% across the board in 1999, with median class A space commanding $50 per sf, class B space $39.50 per sf, and class C space $36.50 per sf. Baum’s definition of A, B and C relies on average number of pedestrians passing a block per weekday. “A” blocks have an average of 30,452 pedestrians per weekday, with steady traffic throughout the day; “B” blocks average 26,101, with most of them at lunch or the rush hours; and “C” blocks average 11,303, with foot traffic relatively limited.

“We attribute this increasing [in rental rates] to the city’s shift to a more 24/7 environment,” says Allen Joffe, a spokesman for Baum. “With a growing Downtown office population and more residential developments in and around the Loop, retailers are recognizing that they can do more than just a 9-to-5 weekday business. Owners are capitalizing on this increase in foot traffic and are correspondingly raising rental rates.”