Restaurants and bars are the cornerstone of the River North retail market, accounting for nearly 40% of all retail space in the region, according to Stone. And restaurants in River North are holding up better than those in the Loop, said Stone manager John Vance.
One reason: River North has a large residential population and also attracts a lot of tourists, while Loop food and beverage tenants tend to rely heavily on office workers for their business. With so many downtown professionals still working remotely or on hybrid schedules, lunch and happy hour customers aren’t coming as much as before the pandemic. The loop retail vacancy rate rose to 27.4% at the end of last year, from 26.3% in mid-2021, according to Stone.
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“River North, relative to the Loop, has a much larger customer base than the Loop,” said Vance, co-author of the River North report with Stone executive Noah O’Neill. The demand for space from restaurants and other hospitality concepts in River North is “extremely strong”.
COVID-19 has accelerated the demise of River North establishments like the Rainforest Coffee, Lawry’s, Bottled Blonde and Devon Seafood Grill, but rental has resumed over the past nine months or so. Gordon Ramsay Burger opened in space at 2 E. Ontario St. vacated by the Wahlburgers. Boka Restaurant Group plans to open a restaurant in the former Bottled Blonde space at 504 N. Wells St. And Yardbird Table & Bar is moving into the former PF Chang space at 530 N. Wabash Ave.
Other River North commercial leases over the past year include Target’s deal for 17,000 square feet of space at 630 N. LaSalle Drive, a former Infinity showroom. And Whole Foods Market recently moved from its longtime store at 30 W. Huron St. to a new 66,000 square foot market at 3 W. Chicago in the One Chicago development.
Other tenants who need large spaces have several choices, including a former Bed Bath & Beyond at 530 N. State St. and the Rainforest Cafe at 605 N. Clark St., launched as a potential site of a marijuana dispensary. And a 59,000-square-foot space at the foot of the Trump International Hotel and Tower has stood virtually empty since the riverside skyscraper opened in 2008.
“I just don’t think it’s going to rent-ever,” Vance said.
It’s harder to find spaces under 15,000 square feet for smaller tenants, he said. Excluding large blocks of space, River North’s vacancy rate drops to 14.7%, according to the Stone report.
Bounded by Michigan Avenue to the east, Chicago Avenue to the north, and the Chicago River to the west and south, the River North retail market totals approximately 3.4 million square feet. Designers and art galleries represent the second category of the market after restaurants and bars. Concentrated in buildings north of the Merchandise Mart, designers and galleries make up about 10% of River North’s retail space, according to Stone.
Grocery stores make up about 7% of the total, while fitness tenants make up 5%. Clothing retailers are barely a factor in River North, taking up about 1% of the 3.4 million square foot retail market, according to Stone.
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The story has been corrected to adjust the effective date of the Loop store vacancy rate for 2021.