Though big, multi-story flagship stores used to be en vogue on North Michigan Avenue, many retailers these days want more compact spaces to save on real estate costs. Big stores stocked with tons of inventory don’t make as much sense in the e-commerce era, with more shoppers buying online. Once exception: Aritzia, the Canadian women’s apparel chain that recently signed a lease for a three-story, 46,000-square-foot building formerly occupied by Gap.
H&M was pursuing space in the Gap building but lost out to Artizia. So it’s back in the hunt for a another location. Its current lease expires in August 2023, according to real estate data provider CoStar Group.
Representative of H&M and Acadia Realty Trust, which owns 840 N. Michigan, did not respond to requests for comment.
North Michigan Avenue has had a rough couple years, with the COVID-19 pandemic, rioting and rising crime depressing retail sales and prompting a wave of store closings. Macy’s, Gap, Uniqlo and others have left the Mag Mile since 2020. While the recent Aritzia lease lifted the spirits of the Mag Mile business community, almost a quarter of all retail space on the boulevard remains vacant.
It’s good news that H&M isn’t ditching North Michigan Avenue altogether, but its move is expected to result in a net increase in vacant space there. And its departure from 840 N. Michigan leaves a big hole to fill for Acadia, which paid $144 million in 2014 for an 88% stake in the 87,100-square-foot property.
In addition to H&M, Verizon leases about 27,000 square feet in the building, space formerly occupied by Escada.
Acadia has problems elsewhere on North Michigan Avenue. The real estate investment trust, based in Rye, N.Y., also owns a 61,600-square-foot building at 717 N. Michigan Ave. that was completely empty until It’Sugar leased about 11,400 square feet formerly occupied by a Disney store.