CHICAGO | General Developments

[the urban politician]

^ That's what pisses me off about the retail of the River East Center, which was built perhaps 12-15 years ago, and still there is so much vacant retail space. An explanation for that evades me when ground level retail elsewhere in Streeterville is filling up

[ithakas]

Originally Posted by marothisu

There's a few buildings near me that have had their commercial/retail spaces not taken for 4+ years which is the entire time they've been offered. I'm pretty sure a major reason is the cost of rent (these are luxury buildings and aptly, the price of rent there is a lot for Chicago). I was thinking the other day how if someone divvied them up into smaller spaces and thus cheaper, how much easier it would be to fill up retail/commercial spaces. I don't know why these developers are so fucking stupid to not think of that or not realize it from the beginning.

Chicago really, really needs to change how they do that or else these types of places are going to continue to have more vacant space than it really deserves. There is no reason in hell why a developer has to be so greedy and isn't able to sell 15,000 sq ft of retail/commercial in a downtown area, especially near train stops and/or hotels and many residents. I feel like it's common sense and NYC really gets it, but somehow half the developers in Chicago making these decisions are too dumb to realize it even if the cost of real estate here is much lower than NYC.


If you have 15,000 sq ft of space and it's only 1 space, at $3 per sq ft, what are the chances that someone takes it? But, if you divide that up by 5 spaces at 3000 sq ft each (which is still a large space), you are offering up people to pay $9000/month in rent instead of $45,000/month in rent. The people who can afford $45,000/month in rent are the larger chains of the world, on average. $9000/month is still a lot but you'll get smaller business in there and you can make some areas way more diverse in the types of business.

The problem doesn't lie in the high rise itself, but the greed and intelligence of the developer for ground floor retail/commercial IMO. There is zero reason why you have to make 15,000 sq ft of ground floor commercial/retail and only sell it to one or two businesses.

I'm with you. There's only a couple corridors where the giant retail footprints make sense - State Street and Michigan Avenue on the Magnificent Mile. The developers need to segment the retail space in the first place, because I think the larger footprints that are always in new development here keep the small, interesting businesses from even thinking they can open downtown.

[marothisu]

Originally Posted by the urban politician

^ That's what pisses me off about the retail of the River East Center, which was built perhaps 12-15 years ago, and still there is so much vacant retail space. An explanation for that evades me when ground level retail elsewhere in Streeterville is filling up

Yes, because these developers have the right combination of stupidity and greed to not divide the space up into smaller spaces to be able to sell it easier. Just think about these situations and how much money these guys are missing out on.

If your 15K sq ft space costs $45,000 per month, you're essentially for 4 years missing out on collecting at least $2.16 million. Instead, you've collected $0. Now imagine you divide it into 5 spaces and 1 year later 3 of them get taken and then a year after that the other two get taken. You've collected over $1.4M at the end of year 4 instead of $0 because you were too dumb/greedy and were obviously not good at math. The $1.4M that could be used to improve your building, or put towards something else for your business.

[ardecila]

^ Not necessarily up to the developer.

Lenders often demand a credit tenant (usually a national chain), but there are only so many of those to go around and they are extremely risk-averse with expansion. The developer wants to fill their space, but the lender won't allow those indie businesses in. That's often why developers will fill ground-level space with extra parking, lobbies, or amenities instead of retail - it's often a money loser. If zoning codes or planning staff demand retail space, the developer will sometimes even build their pro-forma assuming a loss on the retail when they can't rent it out.

Plus, the retail environment in New York is vastly different from Chicago. Chicago sold out to chains, suburban-style. We created huge shopping districts along Elston/Clybourn and Roosevelt that absorb a ton of the retail demand from the inner city, and we make it easy for people to drive to those places by mandating parking and expanding roads. Neighborhood retail is now almost entirely based around bars and restaurants, because people don't want to drive home from those, and service busineses like dentists and yoga studios that don't have national chain competition.

Residents of New York often don't have the option of driving to big box stores because they don't have cars, even though those stores exist in areas of Queens and the Bronx. Those people are forced to shop at small local stores (and pay a little more), bodegas and small supermarkets, hardware stores, etc. Providing retail in your development is not just a nice urban-planning gesture but a key element in creating livable conditions for your tenants.

[untitledreality]

Originally Posted by Mr Downtown

So where are the highrise residential neighborhoods you think deserve admiration?

Flatiron District, UES, UWS, Gramercy

[Mr Downtown]

Originally Posted by marothisu

Having high rises does not automatically mean your neighborhood and way things are on the street are automatically lesser and it's going to get ruined.. . . What matters is how it meets the street, how business is divvied up on the ground level, etc.

Ah, my favorite argument: "OK, it doesn't work very well in reality, but how's it work in theory?"

developers have the right combination of stupidity and greed to not divide the space up into smaller spaces to be able to sell it easier

With your knowledge of where there's an inexhaustible supply of national credit tenants—in a city that already has enough retail space for quadruple its population, and is growing by nearly 100 people each year—you should really get into retail brokerage. It's a pure commission business, so the sky's the limit.

[marothisu]

Originally Posted by ardecila

Plus, the retail environment in New York is vastly different from Chicago. Chicago sold out to chains, suburban-style. We created huge shopping districts along Elston/Clybourn and Roosevelt that absorb a ton of the retail demand from the inner city, and we make it easy for people to drive to those places by mandating parking and expanding roads. Neighborhood retail is now almost entirely based around bars and restaurants, because people don't want to drive home from those, and service busineses like dentists and yoga studios that don't have national chain competition.

First of all, that's only true in some parts of Chicago. Yes, Chicago has more chains than NYC, but it still has much less than a lot of other cities not named San Francisco, NYC, DC, etc. LA is even worse than Chicago by a long shot.

Residents of New York often don't have the option of driving to big box stores because they don't have cars, even though those stores exist in areas of Queens and the Bronx. Those people are forced to shop at small local stores (and pay a little more), bodegas and small supermarkets, hardware stores, etc. Providing retail in your development is not just a nice urban-planning gesture but a key element in creating livable conditions for your tenants.

You are using NYC synonymously as Manhattan, which is what most people do when talking about NYC, but it's still wrong. There are 4 other boroughs in NYC and while many people don't own cars in them, it's still by large percentage points more than Manhattan (and a few boroughs are downright a lot more). You'll find a lot more people using cars in Queens (which is larger than Manhattan) than Manhattan for example.

85% of households in Staten Island have at least one car while that figure is 65% in Queens. Together, that population represents almost the population of the entire city of Chicago.

[the urban politician]

Originally Posted by Mr Downtown

With your knowledge of where there's an inexhaustible supply of national credit tenants—in a city that already has enough retail space for quadruple its population, and is growing by nearly 100 people each year—you should really get into retail brokerage. It's a pure commission business, so the sky's the limit.

^ Retail is local, though, and Chicago's central area has long been seeing rapid population gain.

If you just look at this market alone, there should be an increased demand. The developer of the McClurg court smartly redeveloped their retail space into smaller storefronts and they have leased pretty well. There are still about 3-4 more residential towers within walking vicinity that will be online in the next few years, which will be adding 1-1500k people to the population in the immediate area.

[marothisu]

Originally Posted by Mr Downtown

Ah, my favorite argument: "OK, it doesn't work very well in reality, but how's it work in theory?"

Minus the fact that dividing up huge spaces of retail/commercial into smaller ones does work in reality. Removing any barriers that another poster talked about, it's simple Economics. Do you really think that's never happened before? "Oh hi guys, I'm looking for a 3000 sq ft space downtown, but you're offering 15,000 sq ft. I really like your location but I simply can't afford $45,000/month in rent but I could afford up to $12,000/month in rent maybe. Oh you want to put it down to 3000 sq ft? Well, fuck off I don't want it anymore all of a sudden even though I still like your location and I could afford it."

Originally Posted by Mr Downtown

With your knowledge of where there's an inexhaustible supply of national credit tenants—in a city that already has enough retail space for quadruple its population, and is growing by nearly 100 people each year—you should really get into retail brokerage. It's a pure commission business, so the sky's the limit.

Anybody who quotes the entire city population growth without getting into particular areas doesn't belong to participate in any conversation related to that. It's shows a certain naivety related to this.

Nobody, including me, was talking about city wide. Everyone here is talking specifically about high rise areas, which a large chunk of it for the city equals downtown. Are you so much in denial or living under a fucking rock to not see that the downtown area, where a big chunk of the city's high rises are, is growing and has been growing even when Chicago was quoted as losing over 200K people in the last Census? The Loop grew by 80% between these censuses (+13,000 people). The Near North Side grew by 10% (+8000 people), The Near South Side grew by over 120% (+12,000 residents), and the Near West Side grew by 18% (+8000 people). All together, the downtown area grew by over 40,000 people while the city lost 200K people. So you can quote the city wide numbers all you want, but only someone who isn't well versed in how this shit works wouldn't get down to a more granular geographical level. Not to mention that this was completed in 2010. Since part of 2012/2013 and on, the downtown area has had an influx of several thousand more housing units and many hotel rooms, and that number continues to grow by the thousands to this day and will continue to do so for the next few years.


Or how about the fact that the tourism numbers for 2014 were higher than pretty much any year in history and most of the hotels, are downtown in high rise districts?

If you don't understand the fact that (a) we're talking about high rise areas and (b) the downtown area is not only growing with residents but also tourists, then you shouldn't even be talking. It's like you're arguing the fact that while the downtown area is adding residents, tourists, and hotels but we shouldn't add much new retail because Englewood, West Englewood, etc, 6+ miles south of downtown, is losing residents.

[ardecila]

Originally Posted by marothisu

First of all, that's only true in some parts of Chicago. Yes, Chicago has more chains than NYC, but it still has much less than a lot of other cities not named San Francisco, NYC, DC, etc. LA is even worse than Chicago by a long shot.

Yeah, but all those other cities "not named SF, NYC, DC, etc" don't have a ton of walkable, amenity-rich neighborhoods. The presence of suburbanized chain retail centers is antithetical to walkable urban neighborhoods - that's my point. If you encourage big-box chains to move in and then spend billions encouraging city-dwellers to drive there, don't be surprised when the mom-and-pop stores in walkable locations can't compete.

In downtown Chicago, we've now seen a lot of supermarkets opening up, which is great when it allows people to take care of their daily shopping within walking distance. But for all sorts of other merchandise - hardware/home improvement, clothing, sporting goods, etc - even most downtown residents will hop in a car and drive to North/Clybourn or Roosevelt.

You'll find a lot more people using cars in Queens (which is larger than Manhattan) than Manhattan for example.

Admittedly, yes. But when we're talking about walkable urban areas, we're not talking about the parts of Queens where car ownership is high. In fact, those areas are much more similar to Chicago with large auto-oriented shopping centers like Queens Center or Northern Blvd in Sunnyside. I don't think Queens is seeing a ton of highly walkable, mixed-use new development either.

[marothisu]

Originally Posted by ardecila

Yeah, but all those other cities "not named SF, NYC, DC, etc" don't have a ton of walkable, amenity-rich neighborhoods. The presence of suburbanized chain retail centers is antithetical to walkable urban neighborhoods - that's my point. If you encourage big-box chains to move in and then spend billions encouraging city-dwellers to drive there, don't be surprised when the mom-and-pop stores in walkable locations can't compete.

Go to Midtown Manhattan in some areas, it's the same thing going on. Some parts of it are a lot like a Streeterville. You will have a lot of Walgreens (Duane Reade), Starbucks, Potbelly type of stuff and every once in awhile a more local restaurant hidden away. Not everywhere even in Manhattan is great for this in reality.

In downtown Chicago, we've now seen a lot of supermarkets opening up, which is great when it allows people to take care of their daily shopping within walking distance. But for all sorts of other merchandise - hardware/home improvement, clothing, sporting goods, etc - even most downtown residents will hop in a car and drive to North/Clybourn or Roosevelt.

Well yes, there are some though for sure and it needs more.

Admittedly, yes. But when we're talking about walkable urban areas, we're not talking about the parts of Queens where car ownership is high. In fact, those areas are much more similar to Chicago with large auto-oriented shopping centers like Queens Center or Northern Blvd in Sunnyside. I don't think Queens is seeing a ton of highly walkable, mixed-use new development either.

You do realize that a lot of Queens is just as dense, if not more so than pretty much anywhere in Chicago, right? There are plenty of very, very walkable and dense areas in Queens. And yes, it is seeing highly walkable mixed use new development. Look at parts of LIC for example. Of course, Brooklyn is seeing a lot more but regardless Queens has some too and they already have some very very walkable areas.

Just from a Walkscore perspective and neighborhoods in Queens
* Elmhurst - 96
* Ridgewood - 95
* Long Island City - 94
* Corona - 93
* Jackson Heights - 93
* Astoria - 92
* Rego Park - 92
* Woodside - 92
* Forest Hills - 90
* Flushing - 88
* Woodhaven - 88
* Jamaica - 88
* Kew Gardens - 84
* Middle Village - 82

etc

[Mr Downtown]

Originally Posted by marothisu

dividing up huge spaces of retail/commercial into smaller ones does work. . . it's simple Economics.

Maybe you can make your fortune selling "WILL DIVIDE" signs to retail brokers. I bet none of them ever thought of that before.

the downtown area, where a big chunk of the city's high rises are, is growing and has been growing even when Chicago was quoted as losing over 200K people in the last Census?

The outlying areas are relevant because so much downtown retail space used to function as the regional shopping for the South and Southwest Sides. With entry of big-box centers on the periphery, racial change, and population loss, all that space on State Street is now empty or adapted for educational use. Chicago doesn't have the geographic barriers seen in New York, San Francisco, or LA. So the sobering citywide population numbers in Chicago are more relevant than auto ownership rates on Staten Island.

[marothisu]

Originally Posted by Mr Downtown

Maybe you can make your fortune selling "WILL DIVIDE" signs to retail brokers. I bet none of them ever thought of that before.

Actually many are advertised as being divisible. The problem is that they never divide them by anything more than 2 spaces for some of the newer more expensive buildings here. There are some exceptions of course, but some of the newer more expensive buildings, from what I've seen, only offer up the ability to split it out into two spaces which, for what they're charging, is only going to attract the bigger chains that can afford relatively very high prices.

For as much as I don't like the Loop as a neighborhood to live, the one thing a fair number of buildings did well was dividing up their space so it's not one huge space or two pretty large ones. Unfortunately, there's a ton of blech chains there. However, I've noticed in the last month or two that the Loop has been getting some more legitimate places (even if they are chains, they are not the McDonald's and Subways all the time. A Bubble Tea place just opened for example - and while it's a chain that has like 10 locations in NYC mainly Manhattan, I'll take it any day over a McDonald's or yet another Starbucks).

The outlying areas are relevant because so much downtown retail space used to function as the regional shopping for the South and Southwest Sides. With entry of big-box centers on the periphery, racial change, and population loss, all that space on State Street is now empty or adapted for educational use. Chicago doesn't have the geographic barriers seen in New York, San Francisco, or LA. So the sobering citywide population numbers in Chicago are more relevant than auto ownership rates on Staten Island.

From a purely neighborhood perspective, they aren't fully relevant to this discussion - only a small percentage. You are obviously in denial about the growth of the downtown area if you have to qualify it with the fact that an area like Englewood is losing population. Yes, people in Englewood can be important to downtown or any other part of the city, but they're no less or more important than any other resident of the city. And when you're dealing with storefronts and those storefronts are in dense and pretty damn populated areas, the most important statistics are how many people actually live RIGHT THERE (not 10 miles away), how many people have jobs RIGHT THERE, and how many hotel rooms (with vacancy rates) are RIGHT THERE.

When you have a small area that will add let's say 1000 permanent residents who have money to spend and are willing to spend it, you would be an idiot to not consider new retail/commercial there no matter what is happening anywhere else in the city. If I am a developer, this is what I'm looking at (along with how many jobs are in the area and also how many hotels) - I wouldn't give a shit that Roseland has been losing population and that would somehow weigh heavily into me not trying to fill my spaces with tenants in an area with foot traffic in the multiple thousands per day.

It's even greater for when it's in an area with a lot of hotel rooms around and hotels that can put heads in beds all the time. Most hotel rooms do not have any sort of kitchen and any of these visitors needs a place to eat. There are 3 buildings right around me with open retail and commercial space. I live in the densest, non fluke tract and it's still adding residents. There's also a handful of hotels right around here. There's no reason why these spaces cannot be filled. The newest building near me, State & Chestnut, even advertises on their space how many hotel rooms are nearby as well as how many people use the Chicago Red Line stop every year. They are actually being smart about it from a marketing persepctive.

[streetline]

Originally Posted by UrbanLibertine

Demolition permits issued for the entire block along Fulton Market between Green and Peoria, but preserving the 3-story building's facade.

Anybody know what project is proposed for this site?

That would be the Brooklyn Bowl, along with 23k ft of additional retail space.
http://www.convexityproperties.com/l...-832-w-fulton/

[UrbanLibertine]

Originally Posted by streetline

That would be the Brooklyn Bowl, along with 23k ft of additional retail space.
http://www.convexityproperties.com/l...-832-w-fulton/

Nice! Thanks

[pilsenarch]

well, there was no response from Mr.D, but i think the crowd here has clearly established dozens of precedents for walkable, livable neighborhoods with highrises and even supertalls...

and, it is once again all about diversity and density (compare the spire, the plaza, the neighborhood, etc. with SHoP's supertall now under construction on 57th Street or any of the other towers in the vicinity)

[marothisu]

Originally Posted by pilsenarch

well, there was no response from Mr.D, but i think the crowd here has clearly established dozens of precedents for walkable, livable neighborhoods with highrises and even supertalls...

and, it is once again all about diversity and density (compare the spire, the plaza, the neighborhood, etc. with SHoP's supertall now under construction on 57th Street or any of the other towers in the vicinity)

I think that anybody who's familiar with NYC, especially Manhattan, would realize sooner or later that high rises don't in and of themselves ruin the urban fabric/neighborhood, etc. There's other factors to it that can contribute to that or make it seem as if it's not even a big deal. I mean, yeah there are places there that kind of aren't great for it, but then even in those areas it's like that for a few blocks or streets, then all of a sudden it gets better.

Don't get me wrong either - Chicago has areas in the high rise sections that do it well too but then there's other areas where I just don't get what they are even thinking. But the reason why those ones aren't great has nothing to do with whether they're a high rise or not. Just think about the parking podiums that could be storefronts, for example, but aren't - and there's nothing there. Think about the giant restaurant at the base of a tower which closes at 10pm for some reason and is just dead at 11pm. Think about the giant space in a new high rise that's been vacant for 2+ years in an area with many residents, hotels, near train station, etc yet other buildings nearby have no problem switching in and out tenants from their smaller spaces.

[Mr Downtown]

Originally Posted by pilsenarch

i think the crowd here has clearly established dozens of precedents for walkable, livable neighborhoods with highrises and even supertalls...

I must have missed that list. There were some vague suggestions about the areas around Manhattan's Central Park, but nothing any more specific than that. Certainly I've seen no one mention any neighborhoods where the majority of the buildings are less than 75 years old.

To bring this back to weirdaaron's question, the West Loop doesn't get to choose prewar Upper East Side. That's simply not on offer in today's development environment. Seeing that the best they could hope for is, I suppose, Battery Park City—it's quite understandable that they could rationally say "we choose the form that more reliably supports walkability and neighborhood retail, as proven the world over. We choose midrises."

[LouisVanDerWright]

I mentioned in my first post on the issue that both Hyde Park and South Shore are pretty decent environments with high rises. Though better examples here would be the Gold Coast (also already mentioned), Lakeview, Lincoln Park, and the section of River North South of Illinois. These areas are all some of the best urban environments in city, if not THE best urban environments. I honestly don't even know where you are coming from with these bizzare blanket statements about high rises when I struggle to think of one neighborhood in the city that bests a place like Gold Coast and doesn't have high rises.

In fact, going down the list, it's abundantly clear that the atrocities in Edgewater are the exception rather than the rule. As I said before, even Edgewater used to be a fantastic high rise environment too before the post war era trashed it. It used to be like a denser version of Rogers Park which is yet another great pedestrian environment in the city with high rises mixed in. Did you forget about the existence of the Sovereign, Granville Tower, the three Hotel towers that used to stand between Foster and Bryn Mawr, etc etc? The only one of those towers that remains is fantastically human scaled at its base with probably a dozen storefronts and is a part of the best pedestrian district in the East half of Edgewater which is the section of Bryn Mawr between the lake and Broadway.

I could go on and on, the entire section of Edgewater South of Bryn Mawr is also just fantastic even if it's not very commercial. Even the towers that replaced the hotel address the street reasonably well despite their era and despite their Motor courts. The Breakers, for example, is a heinous concrete box worthy of being Grand Plazas neighbor, yet it has a great base lined with multiple businesses, some of which have set up patio seating despite the dreaded downdraft that makes it physically impossible for pedestrians to survive a foray within 400' of a high rise.

Is that specific enough for you or do I need to go on?

[pilsenarch]

Originally Posted by Mr Downtown

I must have missed that list. There were some vague suggestions about the areas around Manhattan's Central Park, but nothing any more specific than that. Certainly I've seen no one mention any neighborhoods where the majority of the buildings are less than 75 years old.

Vague? What's vague about the neighborhoods surrounding Central Park? Maybe it would be clearer to ask you to point out a neighborhood east/west/south of Central Park that includes highrises and is not a successful walking neighborhood...