From Crain’s Chicago:
“COVID-19 altered the retail landscape—likely forever, experts say—and changed the recipe for success among brands. Each of the three shopping strips that Stone analyzed faced their own challenges, and each has emerged from COVID doldrums in its own way. Armitage hit its lowest vacancy rate in a decade; Damen rebounded from a 2020 low point; and Southport rapidly filled spots vacated by retailers who didn’t survive.
The three corridors are often go-to spots for brands looking to set up shop in Chicago, and industry observers said last year that their post-pandemic fate could be bellwethers for the city’s ability to attract retailers. Furthermore, such retail strips contribute to neighborhood vibrancy, a key aspect as a hybrid work environment continues to dominate in Chicago.
The stretch of Southport between Addison and Roscoe streets was immaculate pre-pandemic, with a 0% vacancy rate. Last year, it moved in that direction once more, decreasing vacancy to 2.2% from 4.5%.
Southport’s skill is quickly replacing new vacancies, and once again proved adept in that area, Winter said. In 2021, for example, Abercrombie & Fitch took over Uncle Dan’s outdoor store, and clothing store Madewell replaced Lou & Grey. That “new blood” helps stave off irrelevancy, Winter said.
Other retailers that moved during 2021 include framing store Framebridge, shoe shop Dr. Martens and Chicago-based women’s clothing store Alice & Wonder.
There were three vacancies on the street included in Stone’s 2021 analysis, but already, accessory store Claire’s has backfilled one, Winter said. One of the newest vacancies on the street: The spot at 3443 N. Southport Ave. where Amazon’s bookstore just closed.
The strengths each corridor had pre-pandemic are again coming to the forefront, said Danny Jacobson, senior vice president at commercial real estate firm CBRE, who was not affiliated with the study. The submarkets can be tough for a broker, though, because there’s rarely room enough for interested tenants, Jacobson said. He’d like to see the corridors expand.
“These are just super stable, established residential markets with high household incomes and good spending power,” he said. “A lot of the brands that you see on the streets now, that’s what they’re looking for.”
There’s only one empty storefront remaining on the four-block stretch of Armitage Avenue analyzed in the survey: It’s the former Charlie Trotter’s restaurant at 816 W. Armitage Ave., and it’s been vacant about 10 years.
People notice the vacancy because it’s such an anomaly on the blocks between Halsted Street and Sheffield Avenue, said Stone retail broker and author of the study Will Winter. Vacancy dropped to 2.9% last year from 7.2% in 2020, according to Stone’s report.
The strip’s strength comes from its high density of digitally native brands, Winter said. Online retailers occupied 18 storefronts in 2021, comprising 23.7% of the corridor’s available square footage. That is up from 22.1% in 2020 and more than double Damen and Southport’s combined e-retailer presence.
“Armitage is the strongest the street has ever been,” Winter said. “The presence of digitally native brands on the street has really taken it to a new level.”
Armitage was a magnet for online brands before the pandemic, and their presence helped the area weather the downturn that hit many brick-and-mortar retailers in the depths of COVID. Digital-first brands were poised to win when customers flocked online to shop. They create strong ties with their online customers, then use data on the ZIP codes that placed online orders to help determine the location of their physical outposts. Experts say that formula has staying power, even as society emerges from the pandemic.
The mix of local and national tenants is strong, too, Winter said. The percentage of national brands increased to 67.8% in 2021 from 60.5% the year prior. New retailers that joined the street last year include Gorjana Jewelry, Taco Bell Cantina, beauty supply store Art of Pure, cashmere shop Naadam and clothing store UpWest.
Few retail strips had a good year in 2020, but for Damen Avenue, it was dismal. Vacancy rates between Willow Street and North Avenue bottomed out at 29.3%, the worst since Stone began its analysis five years ago.
Last year, the situation stabilized. Vacancy decreased to 22%, almost recovering to pre-pandemic levels. The shopping strip had some big gets, too.
Facial bar Face Foundrie opened, adding to Damen’s already rich lineup of cosmetic and pampering brands. Warby Parker, an eyeglass brand that started online, filled a vacant spot once occupied by Toms shoes. Having a brand like Warby could help attract additional digitally native brands, adding to the overall strength of the tenant mix, Winter said.
Face Foundrie CEO and founder Michele Henry said she chose Damen because of strong demographics in the area and co-tenants that attract customers from around the city. The company has since opened a second location in the West Loop.
“We go for high visibility and heavy traffic areas, which support our walk-in model and retail shopping,” she said.
Other new tenants on Damen include menswear store DRT, women’s clothing boutique Prery Collective, consignment shop Stadium Goods Market Center, maternity clothing shop A Pea in the Pod and Black Luxe Candle.
The corridor is not completely in the clear, Winter said. It started digging itself into a hole pre-pandemic, as vacancy rates increased from 11% in 2018 to about 21% in 2019. Spaces once occupied by restaurants lost to the pandemic, like Mindy’s Hot Chocolate and Northside Bar & Grill, have yet to be filled.
“This year’s going to be really critical for the street,” he said. “Can the good work continue to be done to get back to where it was in the year’s leading up to the pandemic?”