Chicago Retail Market Report
Market Overview
Retail properties remain a key part of investor’s portfolios. The demand for retail space in Chicago has risen by 1.9 million SF over the past year. Limited construction activity keeps Chicago retail demand fundamentals in balance. During Q3 2024, Chicago availability further compressed to below 6%, a new record low in 30 years. About 830,000 SF of construction activity is underway, of which over 80% is already pre-leased. Chicago’s positive jolt in leasing activity and tight availability projects that the city should stay in equilibrium throughout 2024 and into 2025.
By the Numbers
- 12-Month Sales Volume: $2.7B
- Vacancy Rate: 4.7%
- 12-Month Deliveries in SF: 997K
- 12-Month Net Absorption in SF: 1.9M
- Y-O-Y Employment Change: 0.1%
Market Performance
Despite the retail market’s positive momentum overall, low population growth and high levels of outdated supply contribute heavily to a generally flat rent growth in Chicago. Throughout Q3 2024, the retail market in Chicago recorded about $2.7 billion in sales volume over the past 12 months, the third-highest level in the nation. In fact, Chicago is the only other retail market, aside from New York, that has sold more than $1 billion over the past 12 months and only experienced a less than 5% sales drop year after year. This shows that retail investors can still be swayed by legacy markets. The diverse economy and population density in Chicago keep it top of mind for investors.
