Magnificent Mile landlords have two more spaces to fill after Forever 21 and Tommy Bahama said they plan to close stores on the strip.
The two closures add to several other gaps in the city’s premier shopping district, including the former Apple Store at 679 North Michigan Avenue that’s been empty since last year, a 5,700-square-foot former Hershey’s shop and a 6,200-square-foot Harley Davidson store above Tommy Bahama, according to Crain’s.
A recent report by Newmark Knight Frank showed the Magnificent Mile with a vacancy rate of 12 percent, up from 4 percent in 2015.
Forever 21’s landlord, Santa Monica-based Macerich, is courting office tenants for the 30,000-square-foot second floor of the chain’s two-level store, not another retailer.
Newmark Knight Frank’s Greg Kirsch told Crain’s the decision makes sense amid the weak demand for second-floor retail space, which has left those rents lower than office rents in some cases.
Co-working firms, advertising agencies and medical tenants have all expressed interest in the second floor, said Avison Young’s Konstantine Sepsis, who’s marketing the space.
Macerich is seeking a retail tenant for Forever 21’s 11,600-square-foot first-floor space. Tommy Bahama, meanwhile, is seeking a tenant to sublease its shop at 664 North Michigan Avenue through the end of its current lease in May 2023.
Despite the desertions, Michigan Avenue is hardly a ghost town. The strip still attracts 30 million visitors a year, and Under Armour and Starbucks are among the tenants to take big spaces on the Mag Mile in recent years. And Canadian apparel shop Roots earlier this year signed a lease with GGP on a space along the strip.
Nationwide, retail sales were up in the second quarter year over year, growing by 5.9 percent compared to the same period in 2017. [Crain’s] — John O’Brien