Oct 18, 2023 - Business

Why some of Mag Mile is succeeding

Front of building with the words 900 and bloomingdale's above door.

900 North Michigan Shops multiuse building is home to Bloomingdale's, Aster Hall food hall, smaller shops and a gym. Photo courtesy of 900 North Michigan.

Nearly a third of Michigan Avenue remains vacant after the pandemic gutted the renowned shopping destination. But the 900 North Michigan Shops building and adjacent Oak Street are bustling.

Why it matters: The story of Michigan Avenue retail venues and restaurants has been doom and gloom over the last three years, but this longstanding, multiuse development could serve as a model for the future of the Magnificent Mile.

State of play: Michigan Avenue's retail vacancy rate is 33%, according to brokerage firm Cushman & Wakefield.

  • Topshop, Uniqlo and Best Buy are among the retailers that have left the shopping strip in recent years.
  • Owners of the Signature Room — 900 North's neighbor across the street — cited "severe economic hardship" as a reason for the iconic restaurant's abrupt closing late last month.

The big picture: The retail corridor has historically drawn tourists from around the world. But tourism has struggled to recover to pre-pandemic levels, and a rise in robberies since last year is raising concerns for retailers and shoppers.

  • Experts have suggested the Mag Mile's fate relies on its being reimagined as an experiential destination — one where Chicagoans, not just tourists, can play as well as shop. That could mean bringing in rotating exhibits or pop-ups, the latter of which 900 North has been testing out.

Between the lines: One reason 900 North hasn't suffered the same fate as some of its neighbors is that its customer base is 80% local, from neighborhoods like Streeterville, Gold Coast and Old Town, the building's business development manager Alicia Skruba tells Axios.

  • 900 North markets itself as a "lifestyle building," which includes residences, a gym, restaurants, retail and a salon. The multilevel shopping center currently has only two storefront vacancies.

What they're saying: Having spaces, like a gym, dedicated to daily and frequent visitors, creates a solid customer base, commercial real estate analyst Rhea Stephen points out.

  • Stephen tells Axios successful retailers and developers know their demographic. "Daily, the area is steeped in high-income earners who live and work in this medical and university district," she says.

Details: In addition to residents, Stephen notes that North Michigan Avenue and the Gold Coast benefit from large health care providers in the area, like Northwestern Memorial Hospital.

  • "People who are in the medical community, who work there, but then you also have patients that are coming in," Stephen says.

What we're watching: A suburban developer bought 830 N. Michigan — former home of Topshop, Uniqlo and Columbia Sportswear — in August for $40 million, which one broker called "the first post-pandemic investment salvo," according to CoStar. It's been vacant since 2021.

  • The clothing brand Aritzia is also slated to move into the former Gap space in the coming months, and H&M will take over Apple's former location at Michigan and Huron.
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