Chicago State Street Retail Vacancies Drop in 2025

Retail vacancy rates on State Street and in the broader Loop area show signs of recovery following recent redevelopment efforts.

Updated on Oct. 21, 2026 in Commercial

Chicago State Street Retail Vacancies Drop in 2025

Live Poll

Is the retail environment in your local shopping district getting better or worse this year?

State Street retail vacancy rates fell to 28.8 percent in 2025, down from a high of 35.1 percent in 2024. This trend mirrors a similar decline in retail vacancies across the wider Loop area.

Why it matters

The shift is driven by the redevelopment of vacant office towers into apartments, which has increased the local population and attracted new retail interest to the district.

State Street vacancy sat at 15.2 percent in 2019, while the wider Loop vacancy rate dropped to 24.7 percent in 2025 from 26 percent the prior year.

The players

Edwards Realty

This real estate firm is managing the redevelopment of the Block 37 property on State Street.

Old Navy

This national clothing retailer is re-entering the State Street market following a brief exit.

The details

Edwards Realty purchased the Block 37 property for 36 percent of its previous sale price and has committed a $25 million investment to the site. Meanwhile, Old Navy is returning to the corridor with a 13,000-square-foot lease, notably smaller than the 32,000-square-foot space it vacated in 2023.

2019: State Street retail vacancy rate was 15.2 percent.
2023: Old Navy vacated a 32,000-square-foot space.
2024: State Street retail vacancy rate peaked at 35.1 percent.
2025: State Street retail vacancy rate declined to 28.8 percent.
2026: Old Navy announced its return to State Street.

Culture Shift

The return of retailers to the Loop reflects the broader urban strategy of repurposing vacant office towers into residential spaces to stabilize city centers. This shift highlights a departure from traditional business-only districts toward vibrant, mixed-use living environments.

Residents of the Loop can expect increased shopping options on State Street as retail footprints stabilize following the arrival of new tenants. The investment in Block 37 also suggests ongoing improvements to common areas and consumer amenities in the primary shopping district.

The takeaway

Urban revitalization is increasingly reliant on residential density to support retail activity in historical business districts. Shoppers should anticipate a transition toward smaller, more efficient retail footprints as companies adapt to current demand levels.