David Stone: Urban Rents Through The Roof
Stone Real Estate founder and principal David Stone, an event panelist just back from a jaunt to London and Barcelona, says empowered landlords in areas like Rush, Oak, or State Street may be overplaying their hand a bit by jacking up rents to well above pre-recession levels. The question is, are retailers doing the kind of sales to justify those rents? Some are, some aren’t, David tells us. But it’s not because of online shopping, which has not been the kiss of death many envisioned. Returning clothes after realizing they don’t fit will always be a pain, and even online retailers have embraced the high-touch benefits of brick and mortar, he says.
Hot tenants of late include Athleta (above) and Pure Barre, and specialty restaurants like Lyfe Kitchen have been surprisingly resilient, David says. He points to River East, where Stone just did substantial leases for Pinstripes and Mrs. Green’s, as a recently revved up submarket (Whole Foods is moving into the old Dominick’s, as well). But one factor not being taken seriously enough: this winter was absolutely brutal for retailers, especially apparel, and it might take the rest of the year to bounce back. Maybe it’s a testament to Chicago’s demographics, but a couple quarters of subpar performance hasn’t stopped national tenants from strategic local expansion, he notes.
