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S P R I N G 2 0 2 2 R E TA I L S PA C E G U I D E
Retail Investors Again Shopping for Deals Across Chicago Metro
T
he reports on the death of the retail sector appear to have been greatly exaggerated. While the shutdown ended up being permanent for some retailers, it in many ways accelerated evolutionary trends that were already underway and, ultimately, will help retail real estate evolve and deliver strong returns for investors, according to Marcus & Millichap’s 2022 National Retail Investment Forecast. Even when accounting for inflation, consumers are spending more today than they did before the pandemic. And it’s not being driven exclusively by e-commerce – physical store-based retail sales currently stand more than 13% higher than they were in 2019. What’s more, store openings outnumbered closures in 2021 and the vacancy rate is projected to realign with the preCOVID measure by the end of 2022, according to the report.
“This year and last will each record net absorption of more than 2 million square feet in the Chicago area, the largest year-end figures since 2017.” What has reinvigorated investor interest in the retail sector and how is this playing out in the Chicago market? Sean Sharko and Austin Weisenbeck, senior vice presidents of investments in Marcus & Millichap’s Chicago Oak Brook office, addressed retail’s resilience and provided insights into trends they are seeing locally in a recent Q&A:
Compared to prior to the pandemic, how much has the retail industry recovered to this point across the Chicago metro? Sharko: There has been an incredibly strong rebound here. This year and last will each record net absorption of more than 2 million square feet in the Chicago area, the largest year-end