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Chicagoans spending habits on the upswing; disposable income is 10 percent higher than the national average
CHICAGO, Oct. 7, 2015 — Chicago is the nation’s largest retail market, containing more than 500-million-square-feet of retail space. But, tight retail vacancy rates on Chicago’s prime streets, like Michigan Avenue, are leading retailers to expand throughout the city. Retail sales growth prospects have become increasingly attractive and obtainable in the Windy City, with consumer spending now back to prerecession levels with nearly four percent annual growth since 2010.
A tighter market makes sense given the disposable income for a typical Chicago household exceeds the national average by more than 10 percent, and the population has higher consumption habits for most retail goods.
“When we look at potential consumer demand against the market’s existing retail supply, we found expansion opportunities exist across every retail segment with the exception of electronics/appliance retailers and personal care stores,” said Larry Kilduff, Chicago Retail Market Lead, JLL. “The region’s wide demographic spread positions retailers favorably across diverse consumer segments in the metro area.”
Strong sales figures translate into new and expanding retail demand, and JLL’s experts point to new submarkets that are now catching the eye of domestic, and increasingly foreign, brands looking for local expansion.
While trendy, budding areas of the city will continue to attract opportunistic retailers, The Mag Mile will remain a top target for more mainstream expansions efforts. With more than 50 million people visiting a year, it’s a prime spot for retailers who want to plant a flagship, particularly with a resurgence of the South Michigan corridor. Although we haven’t seen the same proliferation of flagships as its northern half of Michigan Avenue, between the Chicago River to Oak Street, it’s turned into a restaurant, tourist and residential haven that host seven-days-a-week traffic thanks to Maggie Daley and Millennium Parks, Navy Pier and the Art Institute. If you’re looking to score a small shop space on the Michigan Avenue, you’ll pay upwards of $450 PSF*.
“Chicago’s retail sales activity is expected to have its best year in more than a decade, driven by the growth of private industries and their impact on the employment rate and disposable spending,” added Peter Caruso, Senior Vice President of Leasing,JLL Retail. “Retailers are flocking to Chicago to lay the ground work for their brands in the Midwest will continue to push the envelope by expanding into new submarkets, especially where condos and hotels are being developed or modernized.”
For more information about Chicago’s retail market visit www.jlllretail.com/news
* Asking rents are typically going to be negotiated
JLL’s retail business serves as an industry leader in retail real estate services. The firm’s more than 800 dedicated retail experts in the Americas partner with investors and occupiers around the globe to support and shape investment and site selection strategies. Its retail specialists provide independent and expert advice to clients, backed by industry-leading research that delivers maximum value throughout the entire lifecycle of an asset or lease. The firm has more than 130 retail brokerage experts spanning more than 30 major markets, representing more than 680 retail clients. As the largest third party retail property manager in the United States, JLL is currently handling the management, leasing and/or disposition of more than 710 centers, totaling 83 million square feet specializing in regional malls, lifestyle centers, grocery-anchored centers, power centers, central business districts, transportation facilities and mixed-use projects. For more news, videos and research from JLL’s Retail Group, please visit: www.jllretail.com.
About JLLJLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $56.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.
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