According to CB Richard Ellis, the wind is getting knocked out of the retail market in the Windy City. The Los Angeles-based company released a study of properties 50,000 sq. ft. or greater (excluding regional malls) in Chicago showing an overall vacancy rate increase totaling 10.3%. Thatâ€™s equivalent to the decade-high level set in mid-year 1997. To offer some perspective, in 2001 the vacancy rate was 8.2%.
Here is breakdown of vacancy rates by center type:
(The data covers a base of 99.2 million sq. ft. in the metro area)
*Community and neighborhood centers (largest sector) â€” up to 10%
*Unanchored strip shopping centers â€” up to 16.2%
*Freestanding centers (single tenant occupying a min. of 50,000 sq. ft.) â€” holding steady at 2.7%
*Power center â€” down to 2.1%
CB Richard Ellis managing director Todd Caruso believes vacancies are high, "because of second generation space coming back on the market, due either to store closings or relocations to newer centers which are continuing to come online nearly fully-leased."
He says lack of overall consumer spending plays a large role. "Weâ€™re seeing a number of retailers slow or curtail their expansion plans in the Chicago area, which has narrowed the field of prospective tenants for vacant spaces," Caruso explains.
â€” Erika Hutton, Associate Editor