His company's annual survey of the two-million-sf North Michigan Avenue retail market suggests the air is going out of the balloon. Despite some of the highest rents in the US, asking rent rates along the "Magnificent Mile" have fallen for three straight years, while vacancy has increased for two years in a row. While vacancy has jumped more than two points in a year to 7.1%, asking rental rates have fallen 40% to $35 per sf.

While the retail sector was crowned king among local product types, Kaplan all but declared the regional shopping center an endangered species, noting virtually none are being built now, while "lifestyle" centers are the rage. Meanwhile, as Walgreens stores have become the product of choice among anxious Section 1031 investors, cap rates for those properties have dropped to the 6.5% range.

The trends are reflections of changes in consumer buying patterns in the first decade of the millennium, Kaplan said. However, the consumer has kept his sector extremely healthy.

"In the past two years, we've seen a recession, terrorism, a war in Afghanistan and a war in Iraq. Despite all those shocks to the consumer, the consumer has kept on spending," said Jones Lang LaSalle chief executive officer for the Americas Peter Roberts. "Retail has the strongest fundamentals across the US."

"Was there a recession recently?" Kaplan quipped during a town hall meeting. "It's a very exciting time to be in retail."