Chicago Movie Theaters Keep Shuttering, Posing Costly Challenge For Landlords
When the Showplace Icon movie theater shuttered late last month after 15 years in operation in the South Loop, it became the latest in a growing number of vacant cinemas across Chicago.
A century ago, Chicago was home to more than 100 movie theaters. Now, there are just 15 cinema locations within the city limits, almost all in the Loop and on the city’s North Side, WBEZ Chicago reported.
When movie theaters shutter, their owners are left with real estate that poses a major challenge to repurpose, with sloped, concrete floors and windowless rooms that leave a limited pool of alternative tenants able to fill the void, landlords tell Bisnow.
“It is very, very costly to replace cinemas,” said Fred Battisti, chief revenue officer at First National Realty Partners.
Battisti, who recently converted a former Cinemark Theatre in Columbus, Ohio, into a trampoline park, said he makes sure his team has spoken to every other theater operator within a 100-mile radius before even considering repositioning a cinema.
Leveling the flooring is expensive on its own, and it can be difficult to find a new tenant that can make that cost worth it in the current market environment, he said.
“There are a lot of different levers that you can pull to go into it to potentially make the numbers work, but it's all determined on your cost of capital, how much it costs you to obtain that capital and how much you're willing to put in for an operator,” Battisti said.
Still, some Chicago-area operators are making it work.
In Evanston, AMC signed a long-term lease in 2022 to occupy a portion of the space vacated by Century 12/Cinemark at the onset of the pandemic. The old space formerly contained two separate multiplexes, one with 12 screens and another with six screens, with a common hallway in the middle.
AMC took over the 12-screen theater, and developer GW Properties repurposed the other chunk of space and inked a deal with Sky Zone to operate one of its flagship trampoline and active entertainment parks.
Converting the theater wasn’t hard because of the building’s high ceilings and “solid bones,” said Mitch Goltz, principal and co-founder of GW Properties, but it was expensive.
“For us to really capture a lease for that entire space, it required some demolition and reconfiguring, and the way we laid it out made the most sense at the time to get one contiguous space wide open,” Goltz said.
In addition to theater closures presenting repositioning challenges for landlords in the city, they have also made moviegoing far less accessible for South Side residents.
The Showplace Icon Theatre at Roosevelt Collection Shops opened in 2009, and it was one of the first theaters in the city to feature assigned, plush seating and luxury movie experiences, Block Club reported.
The closure of the Showplace Icon is the second movie theater closure south of Downtown Chicago this year, following the shuttering of Cinema Chatham in January. The Chatham closed because it was no longer “economically viable,” Anthony LaVerde, CEO of Emagine Entertainment, told IndieWire.
There are now only two theaters serving the city’s South Side, which has a population of about 1.2 million people: AMC Ford City 14 and the Harper Theater.
It has been tough sledding for South Side cinemas. Total movie ticket spending per capita in the U.S. and Canada was around $24 in 2023. Using that number as a baseline, the projected gross for the three theaters last year would have been $25M, but the actual gross was less than $7M, IndieWire reported.
Going to the movies used to be a go-to entertainment option for many consumers, said John Vance, a principal at Chicago-based retail brokerage Stone Real Estate. Today, the entertainment landscape is more competitive, with streaming services, televised sports and social media vying for people’s attention, he said.
“How do the theaters survive and then compete against these other entertainment options that are not movies?” Vance said.
