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CHICAGO-The vacancy rate for specialty store space in the State Street/Wabash Avenue shopping district has nearly doubled in the past year to 24.6%, while the asking rental rate of $35.97 per sf is down 8.4%, according to Northern Realty Group Ltd.’s annual Downtown survey. However, that should not be taken as evidence that the area is on the ropes, according to Northern Realty Group president Bruce Kaplan, even though that compares to a tight 3.1% on North Michigan Avenue.

The overall State/Wabash specialty store space market swelled by 24.2% to 1.12 million sf as developers got reacquainted with a submarket that now has more college students than University of Illinois- Champaign/Urbana, Kaplan notes. The net result was 68,007 sf of net absorption.

“The trends on State Street and Wabash Avenue are actually healthier now than they have been in decades,” Kaplan says.

“Look at the success of the long-vacant former Woolworth’s store on North State, which has been leased to H & M, Nordstrom Rack and Walgreens, while Forever 21 has leased the 35,000 sf on South State,” Kaplan adds. “Commitments from these stores are clear signals that important, national retailers have locked onto State Street as a prime target in their expansion strategies.”

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