Large leases have been hard to come by on North Michigan Avenue, one of the country’s highest-rent retail corridors. COVID-19 and other factors — including changing shopping habits, concerns over violence in the city and expected property tax increases — have contributed to high-profile vacancies on the row of stores just north of the Chicago River.
Mag Mile market vacancy has increased to 8.1% from 6.8% in the past year, according to CoStar data. Overall Chicago-area retail vacancy has fallen to 6% during that time, from 6.3%. North Michigan Avenue has seen negative retail absorption over the past year, with 75,600 more square feet being vacated than leased. There has been 2.7 million square feet of positive absorption overall in the greater Chicago retail market.
The Museum of Ice Cream said it expects to open in the spring in space on the south side of the tower, along Pioneer Court. It will be in roughly the same space the Howells & Hood bar and restaurant leased before the building was redeveloped.
Across the pedestrian courtyard is a glassy Apple flagship store and the river, at the far southern end of the Mag Mile. It is the Museum of Ice Cream’s third permanent flagship location, joining ones in New York and Austin, Texas, the tenant said in the statement. The hands-on experience signed its first flagship deal for 25,000 square feet in New York in 2019, before the pandemic.
The Museum of Ice Cream sells tickets for tours through its space, which offers Instagram-friendly photo opps such as a “sprinkle pool” and other colorful settings — and, yes, ice cream. Its Chicago space will include a Sprinkl-L train car inspired by the city’s elevated lines, a dessert-themed mini golf course, a Chicago hot dog-themed ice cream treat and a cafe with outdoor seating, the company said.
“The opportunity to open one of the most ambitious formats of Museum of Ice Cream at Tribune Tower on the Magnificent Mile is incredibly exciting,” co-founder and creative director Marvellis Bunn said in the statement. “The history of architecture, art and revolutionary commerce in this district over the past 100 years makes this a perfect setting for the next iteration of Museum of Ice Cream.”
Retail property owners and brokers have been predicting that experiences such as the Museum of Ice Cream will move into space left behind by retailers that sell products such as clothing. Some of those will be short-term pop-ups, such as The Office Experience, based on the TV comedy, but landlords hope it will lead to long-term leases such as the one at Tribune Tower.
High-profile exits from the Mag Mile have included Macy’s leaving its anchor space in Water Tower Place. That space, which is on parts of all eight floors and the mezzanine level, is empty for the first time since the vertical mall opened in 1975.
Reports that Target was eyeing the space created a public debate about which types of tenants should be pursued for the tourist-driven avenue. The Gap and Uniqlo are other tenants leaving behind multilevel flagship spaces.
The Museum of Ice Cream is the first tenant to lease some of the 50,000 square feet of store space in Tribune Tower, which has been redeveloped into residential condominiums by Los Angeles-based CIM Group and Chicago-based Golub & Company.
The tower’s namesake, Chicago’s largest newspaper, moved out in 2018 after nearly a century. Another sugary retailer, Dylan’s Candy, was a tenant before construction began on the building’s residential conversion.
The redevelopment by CIM and Golub includes creating a new walkway along the tower and Pioneer Court, with retail lining both the south side of the building and the Mag Mile on the west side of Tribune Tower.
“Museum of Ice Cream has raised the bar on customer engagement and set a new standard for creative experiences, which we believe is the type of attraction that will draw scores of people to the area that will energize Pioneer Court and patronize other businesses and dining options here on the Magnificent Mile and the Riverwalk,” Shaul Kuba, co-founder and principal at CIM Group, said in the statement. “The Shops at Tribune Tower provides significant prime storefront space on Michigan Avenue, an area that is now the top option for retailers entering the Chicago market. We are targeting a mix of traditional retail, digital retail expanding into physical spaces, and food and convenience shops that will serve Tribune Tower residents and the greater community.”
Source: CoStar Group, www.costar.com