Chicago Retail Investment forecast
Chicagoland Extends Recovery After Economic Shock;
Prominent CBD Retailers Expand into Outer Submarkets
Retailers spread into suburbs; core assets stable ahead of return to work. While Chicago retailers faced significant hurdles in the aftermath of COVID-19 lockdowns, a substantial rebound occurred in recent months. This year and last will each record net absorption of more than 2 million square feet, the largest year-end figures since 2017. A shift to teleworking as a result of the pandemic have enticed retailers to expand into the northern suburbs, like with the downtown restaurant Le Colonial's extension into Lake Forest. This has led to lower suburban availability than in 2019, whereas vacancy in central districts rose mildly in the year following the pandemic onset. Since last summer's Phase 5 reopening however, North Michigan Avenue and Fulton Market have posted notable positive absorption, even before workday foot traffic returns. These submarkets will benefit from large employers calling workers back into nearby offices. These trends are positive, but vacancy contraction may be limited by ramped-up construction, as the volume of deliveries doubles year-over-year.