www.REBusinessOnline.com October 2022 • Volume 21, Issue 2 HEALTH OF CHICAGO RETAIL MARKET IS MIXED BAG While some tenants have vacated storefronts, others have expanded. As large, institutional owners press pause on transaction activity, private capital steps up to the plate. By Kristin Hiller his summer, Canadian women’s fashion retailer Aritzia signed a lease for 46,000 square feet at 555 N. Michigan Ave. for its fourth Chi-cago-area location. At the time of the lease signing, the deal represented the largest completed transaction on the Magni cent Mile in nearly a decade and the rst agship deal since 2019, according to CBRE. Athletic footwear and apparel re-tailer HOKA opened its rst Chicago pop-up store earlier this year in new ground-oor retail space at 444 N. Michigan Ave., an of ce building ris-ing 36 stories. HOKA opened its rst T pop-up stores in fall 2021 in New York and California. CIM Group and Gol-ub & Co. have owned 444 N. Michi-gan Ave. since 2018 and are working on renovating and repositioning the 517,000-square-foot property. CIM and Golub also own the nearby Tribune Tower, which features 50,000 square feet of retail space in a portion of the property named The Shops at Tribune Tower. Foxtrot Market, the Museum of Ice Cream and Blue Bottle Coffee recently joined the tenant line-up. While there are success stories tak-ing place on the Magni cent Mile, see CHICAGO page 26 Aritzia signed a lease for 46,000 square feet at 555 N. Michigan Ave. for its fourth Chicago-area location. The space was formerly home to Gap. INDUSTRIAL DEMAND STILL OUTPACING SUPPLY By Kristin Hiller lthough the U.S. economy has experienced two consecutive quarters of economic contrac-tion — a period marked by high in-ation and a sharp uptick in interest rates — tenant demand for industrial space remains elevated. Real gross do-mestic product decreased at an annual rate of 0.6 percent in the second quar-ter, following a decrease of 1.6 percent in the rst quarter, according to the Bureau of Economic Analysis. Despite the economic headwinds, the national industrial real estate mar-ket experienced a new record low for Developers continue building to keep pace with user demand, but will closely monitor fourth quarter for any signs of pullback from tenants. A Zilber Property Group recently broke ground on Caledonia Corporate Park near Milwaukee. (Rendering courtesy of Zimmerman Architectural Studios) vacancy in the second quarter, drop-ping 20 basis points from the prior quarter to 3.7 percent, according to Newmark. The brokerage rm states that nearly 30 percent of the markets it tracks are experiencing vacancy at or below 3 percent, offering prospective tenants few options in those supply-starved markets. A dearth of available space and ris-ing construction costs have catapulted the average industrial asking rent to $9.56 per square foot triple net, a 12.7 percent year-over-year increase, ac-cording to Newmark. see INDUSTRIAL page 28 Lack of Multifamily Supply in Chicago Market Boosts Rents page 22 Indianapolis Of ce Sector Begins to Experience Rebound page 23 Strong Growth Occurs in Omaha Market Despite Interest Rate Hikes page 25
Heartland Real Estate Business October 2022: Page 1
