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Market Report

Chicago Retail Market Report

2024 Investment Forecast

Limited New Supply Timely as Space Demand Ebbs;
Investment Activity Still Poised to Accelerate

Economic hurdles moderately soften historically tight conditions. The metro’s overall retail vacancy rate stood at its lowest year-end point on record in 2023. This was bolstered by nation-leading, single-tenant net absorption that prompted the segment to register the same historical feat. Momentum could soften this year, however, as household income growth of 11 percent since the onset of the pandemic has failed to keep pace with inflation. This maintains near-term pressure on consumer spending and weighs on retail sales growth in 2024, which will stand 200 basis points below the market’s prior decade-long average. Still, the metro is well positioned to overcome these hurdles amid tight conditions and another marginal delivery slate, directing demand to existing floor plans. For a second straight year, completions will total less than 1 million square feet, a measure that had not been observed since before 2007. 
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