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2003 : CHICAGO LOOP GROWS IN IMPORTANCE AS A RETAIL LOCATION FOR NATIONAL BRANDS ACCORDING TO BAUM REALTY GROUP'S 2002 LOOP REPORT 2002 Vacancy Rate For Loop Retail Space Drops Despite Difficult Leasing Environment May 12, 2003 Chicago-based Baum Realty Group, a leading retail brokerage firm concentrating on the Chicago metropolitan market, recently published its 2002 Loop Report, which summarizes retail real estate activity in Chicago's Loop. According to the annual report, the Loop retail market continues to grow in importance in the Chicago area. "Years ago the Loop was strictly a five-day-a-week, business-only locale," said Allen Joffe, principal and managing broker with Baum Realty Group. "Today, the evolution to a vibrant, 24-hour-a-day area of commerce is clearly evident. A significant upscale residential component is emerging, and with that comes increasing opportunities for retailers. As a result, we've seen many national companies seeking Loop locations in spite of the overall difficult retail leasing environment." Conducted annually by Baum Realty Group, the Loop Report is an analysis of the retail real estate market of roughly 106 blocks bounded on the north by Wacker Drive, on the east by Michigan Avenue, on the south by Van Buren Street and on the west by Halsted Street between Lake Street on the north and Van Buren on the south. The report lists the 2002 year-end retail vacancy rate at 13.7%, which is a full percentage point lower than the vacancy rate at year-end 2001. The report cites a total of 32 retail transactions completed during 2002, with gross average asking rental rates of $56 per-square-foot. Some of the national retailers that were new entrants to the Loop during 2002 included Krispy Kreme Donuts, Quizno's and Ben & Jerry's, as well as financial services firms such as TCF Bank and TD Waterhouse. The largest shift in Loop leasing activity was in the service retail sector, which in 2002 comprised 24.9% of the total number of transactions compared to 9.5% in 2001. A major change also took place in the bank/financial institutions category, which in 2002 comprised 9.4% of total transactions compared to 23.8% in 2001. Other retail transactions in the Loop in 2002 included: 46.9% fast food establishments; 9.4% in each of the full service restaurants and fashion retail categories. "The large changes in leasing activity in both the service retail and bank/financial sectors are due to the increased demand of office workers for amenities in and around their workplaces and an increased residential base. We anticipate a larger number of financial related transactions to be completed in 2003 over the 2002 numbers," said Joffe. The West Loop market has become a particularly attractive area for retailers thanks to recent corporate relocations and, more importantly, some 2,900 condominium residences under construction or planned for the area bounded by the Chicago River to the east, Halsted Street to the west, Fulton Street to the north, and Congress Avenue to the south, according to Joffe. Retailers such as White Hen Pantry, Starbucks, Kinko's Copy Centers, Alonti Deli, CVS Pharmacy and others have flocked to the area. Currently, Joffe estimates that gross rents in the West Loop are averaging between $33 and $37 per-square-foot, which is slightly less than the greater Loop. However, these rates are likely to rise as retailers realize the growing foot traffic in the West Loop will translate into a higher volume of business. The highest retail vacancies, according to the report, are along Randolph Street, which ended 2002 with a rate of 26.67%, down from 29.31% in 2001. Ending the year with the lowest vacancy rate was LaSalle Street, where the 2002 rate remained unchanged from 2001 at 1.6%. Van Buren Street saw the greatest change in vacancy, increasing 9.62 points during the year to 23.08%. |
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1030 W. Chicago Avenue :: Suite 200 :: Chicago, IL :: 60642 :: P: 312.666.3000 :: F: 312.666.7970 :: info@baumrealty.com |
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