Chicago’s retail market in Q3 2025 is adjusting to slower leasing activity and modest rent growth amid rising availability. Total leasing reached 6.8 million square feet over the past year, down 17% year-over-year, as economic uncertainty and store closures drove move-outs to outpace move-ins by 1.2 million square feet. The market’s availability rate climbed to 5.6%, exceeding the national average of 4.8%, with larger vacancies concentrated in the Central Business District. Despite this, smaller-format retailers, fitness operators, and value-oriented chains like Burlington and TJ Maxx continue to backfill space. Average asking rents rose 1.7% year-over-year to $21.94 per square foot, supported by tight supply, limited construction, and steady suburban demand, particularly in North DuPage and Schaumburg.

 

Key Findings

• Leasing volume totaled 6.8 million SF, down 17% year-over-year, as tenant caution and big-box closures drove a rise in availability to 5.6%, above the national average.
• Market-wide asking rents rose 1.7% to $21.94 per SF, trailing national gains, as soft demand and elevated vacancies tempered landlords’ pricing power despite limited new supply.
• Areas like North DuPage and Schaumburg outperformed with 2% annual rent growth, supported by tight supply, strong consumer traffic, and virtually no new retail construction underway.

 

Chicago Retail Supply & Demand Dynamics

Source: CoStar Group, Inc.

 

Chicago Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 5.0%
• Current Population: 9.58M
• Households: 3,709,529
• Median Household Income: $92,573

 

Chicago’s retail and commercial market in Q3 2025 remains resilient, supported by a diverse economy, world-class infrastructure, and a highly educated workforce. As North America’s primary logistics and distribution hub, with two major airports, six Class I railroads, and ten interstates, Chicago attracts major corporate tenants and investment across sectors. The metro’s balanced industry base, with no sector exceeding 15% of output, provides economic stability and steady demand for office, industrial, and mixed-use space. Affluent growth in Downtown and Northshore neighborhoods, combined with median household incomes 12% above the national average and relatively affordable housing, underpins strong consumer spending.

 

Population, Labor, & Income Growth

Source: CoStar Group, Inc.

 

Chicago Retail Construction

Chicago’s retail construction pipeline remains limited, helping maintain balanced market fundamentals. Over the past year, retail inventory declined by 8,000 square feet, compared to an annual average of 1.5 million square feet in 2015–2019. Most new development consists of build-to-suit, grocery-anchored, and mixed-use projects, with 1.1 million square feet under construction, only 15% available. Deliveries remain concentrated in outer suburbs such as Northwest Indiana, South Route 45, and the Western East/West Corridor, which lead the region in activity. Urban development is modest, led by South Chicago and Fulton Market. Overall, construction represents just 0.2% of total inventory, well below the national average of 0.4%.

 

SF Construction Starts

Source: CoStar Group, Inc.

 

SF Under Construction

Source: CoStar Group, Inc.

 

Chicago Retail Sales

Chicago’s retail investment market totaled $3.1 billion in sales over the past year, ranking among the top five U.S. metros despite an 8% year-over-year decline and a 20% dip from the 10-year average. Private investors led activity, accounting for 57% of transaction volume, while institutional investors scaled back participation. Most deals involved assets under $5 million, with only 14 trading above $20 million, reflecting a shift toward smaller suburban properties. The average sale price held steady at $188 per SF, supported by strong demand in submarkets like Schaumburg and Northbrook. Limited new development and constrained supply are expected to stabilize pricing and support gradual recovery ahead.

 

Retail Sales Volume

Source: CoStar Group, Inc.

 

By the Numbers

Source: CoStar Group, Inc.

• Sales Volume: $847M
• Price Per SF: $187
• Cap Rate: 8.0%
• Vacancy Rate: 4.9%
• Rent Growth: 1.7%
• Asking Rent Per SF: $21.94
• Under Construction: 1.1M SF
• Delivered: (249K) SF
• Absorbed: (143K) SF