Another prominent fashion brand has left the Gold Coast neighborhood, adding to an ongoing shake-up in the turbulent retail real estate market.
High-end designer Marc Jacobs closed its store at 11 E. Walton St. last month after almost a decade at the corner of Rush and Walton streets, the property's owner confirmed.
The store's lease at the location recently expired, according to landlord Acadia Realty Trust, opening up a roughly 2,700-square-foot retail vacancy on the ground floor of the Waldorf Astoria Chicago hotel.
The departure comes just a few months after luxury retail boutique Barneys New York announced it would close its Gold Coast store one block north of the Marc Jacobs location after filing for bankruptcy protection from its creditors.
Both examples illustrate what's ailing retail landlords these days. While the rest of the real estate market has thrived during the longest period of economic growth in U.S. history, the rise of consumers shopping online has battered brick-and-mortar shops. Department stores have been the hardest hit, and overall retail closings have outpaced openings by thousands per year, leaving big vacancies behind. Many retailers still want physical stores but have shrunk their footprints as Amazon and other e-commerce platforms have become more popular.
Some retail locations are weathering the storm by finding new tenants that are more immune to online shopping, such as fitness clubs and restaurants. That movement helped the Chicago-area retail vacancy rate inch down last year.
Chris Conlon, executive vice president and chief operating officer at Acadia Realty Trust, said he's bullish on retail in the Gold Coast and said his firm has received "robust" interest from retailers looking to fill the Marc Jacobs space.
"The Rush and Walton intersection has really emerged over the past three to five years to be a dominant retail quadrant within the Gold Coast, driven by the success of Lululemon, Aritzia, YSL, Reformation and others," he said. "It's been endorsed by a lot of great domestic and international retailers that perform very well."
A spokesman for Marc Jacobs couldn't be reached.
White Plains, N.Y.-based Acadia's hunt for a new tenant comes as the real estate investment trust looks to plug another hole in the Clybourn Corridor that was also stung by the trend of major retail closures. Forever 21, which filed for Chapter 11 bankruptcy in September, recently vacated its 16,000-square-foot store at 865 W. North Ave.
Acadia paid $44 million for the retail portion of the Waldorf Astoria Chicago in 2014. The hotel is owned separately and is going through some big changes of its own.
A debt fund controlled by Chicago real estate investment firm Walton Street Capital recently took ownership of the 215-room hotel from a venture of hotelier Laurence Geller and Wanxiang America Real Estate Group after the latter defaulted on loan payments. The Walton Street venture recently hired a broker to sell the building, according to sources familiar with the offering.
The hotel opened as the Elysian in 2009 and was sold in 2011 for $95 million—then a record-high $505,000 per room—to a venture of billionaire Sam Zell and hotel chain Hilton Worldwide, which rebranded it as the Waldorf Astoria Chicago.
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January 15, 2020 at 11:11PM
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