Posted 2 months ago
FOR IMMEDIATE RELEASE | May 16, 2019
CHICAGO—Chicago Loop Alliance today released its “State of the Chicago Loop: 2018 Economic Profile,” providing data on a variety of industries in the Loop, including commercial and residential real estate, retail, infrastructure and more. It also tells a larger story about where the Loop fits into Chicago as a whole, which is rapidly changing as the West Loop continues to transform and megadevelopments like The 78 and Lincoln Yards progress. The conclusion of the report is that the Loop remains the heart of an expanding, thriving Central Area, most notably due to its unique level of accessibility thanks to robust transit.
Chicago Loop Alliance last released an Economic Profile of the Loop in 2013, and in 2011 before that. This updated report on 2018 not only serves to show where the Loop is today, but how it has changed over the past decade. The report was completed by Chicago-based Goodman Williams Group.
“One of the ways Chicago Loop Alliance is able to advocate for the Loop is through releasing reports like this Economic Profile,” said Chicago Loop Alliance President and CEO Michael Edwards. “There really isn’t another organization gathering and packaging data to this extent on the Loop specifically. We believe it’s important for the business community to know where the Loop stands and where the Loop appears to be going.”
Key Points: Section 1: Employment and Office Market
- Employment in the Loop has continued to grow in recent years, and much of that growth can be attributed to office relocations from Chicago suburbs.
- Since 2010, the number of private-sector jobs in the Loop has increased by 23.5 percent, outpacing the City of Chicago, which saw an increase of 18.4 percent, and the Chicago Metro Area, which saw an increase in 14.8 percent.
- The Loop now holds 28.4 percent of all private-sector jobs in Chicago, up 1.2 percent since 2010.
- Since 2013, 19 companies have moved 863,000 square feet to the Loop from the suburbs.
- The office vacancy rate in the Loop has fallen from 17 percent in 2010 to 13.2 percent in 2018.
- Most new office developments are being built outside the Loop where there is more space. The Loop’s competition includes the West Loop, River North and proposed developments like Lincoln Yards and The 78.
“Chicago’s Loop area reflects diverse industry sectors and rich options for those seeking to join its labor force,” said Karin Norington-Reaves, Chief Executive Officer of the Chicago Cook Workforce Partnership. “As the workforce development agency for the City of Chicago and Cook County, The Chicago Cook Workforce Partnership has been thrilled to collaborate with Chicago Loop Alliance on our semi-annual hiring event Hospitality Hires Chicago, in which hundreds of qualified candidates have the opportunity to interview with some of the Loop’s finest employers. CLA’s participation in this effort helps ensure that every business in the Loop, no matter its nature, has access to a talent pipeline which keeps it competitive.”
“The information in Chicago Loop Alliance’s Economic Profile of the Loop is helpful data that WeWork needs to grow strategically in this market,” said Ben Blair, Community Director of WeWork. “Understanding trends in employment and the office market, and discovering how those trends connect to our business, allows us to stay ahead of the curve. And having this information within a larger snapshot of the Loop economy makes it that much more valuable.”
Key Points: Section 2: Retail, Food and Beverage
- The retail sector is in the midst of a period of dramatic change, as retailers work to integrate online connectivity and experiential activities in their brick and mortar stores. This is reflected in the Loop by the opening of new store types (including Amazon Go) and many new culinary options (including many food halls).
- Chicago Loop Alliance installed and manages Springboard pedestrian counters along State Street. While foot traffic is down nearly 5 percent from 2017, pedestrian counts are down nationwide, and State Street saw more than 99 million pedestrians in 2018.
- There are 4.37 million square feet of retail space in the Loop.
- The Loop retail vacancy rate is 12.1 percent, up from 10.8 percent in 2013.
- The Loop’s consumer confidence score is 138.4, well above the reading for a stable economy (90).
- More than 66,000 square feet of new restaurant space can be directly attributed to food halls.
“Information is the foundation for making profitable and successful real estate decisions,” said Stanley Nitzberg, principal and executive vice president of Mid-America Real Estate Corporation. “CLA is the source of all that is happening in the Loop and an integral part of our knowledge base when working with clients involved in retail real estate. This updated economic report and the reliable pedestrian counts are awesome data points which helps attract new investment to Chicago’s Loop.”
Key Points: Section 3: Demographics and Residential Market
- Once thought of as solely a place to do business, in recent years the Loop has seen the addition of thousands of residential units and new lifestyle amenities. Residential growth in the Loop has far outpaced prior estimates, turning the Loop into one of the fastest-growing neighborhoods in Chicago.
- Since 2013, the City of Chicago has gained 1.4 percent in population, while the Chicago Loop has gained 28.9 percent (21,258 residents).
- Average household sizes in the Loop are 1.7, whereas they are 2.6 for the city.
- The median age of a Loop resident is 33.7.
- The Loop’s median household income is $105,066—nearly double the median for the city as a whole ($52,908).
- 6 percent of Loop residents 25 and older have a bachelor’s degree or higher, in contrast with the entire city, which sees 38.2 percent.
- 4,449 new housing units have been built in the Loop since 2010.
- Of the total 16,837 residential units in the Loop, 3,908 are owner-occupied.
- The residential vacancy rate in the Loop is 5.9 percent.
“As the owner of a service-based business in a city with the size and diversity of Chicago, it is crucial to understand the various hyperlocal markets in which we operate,” said Ben Creamer, co-founder and managing broker at Downtown Apartment Company. “CLA’s economic profile not only provides insight into the current demographic profile of the Loop, it also helps us identify timely market trends that drive our clients’ interests. Today’s report provides the data to support the continued demand to live in Chicago’s dynamic city center. And, as residential experts on the Loop, we get to see this exciting growth every day.”
Key Points: Section 4: Tourism and Hospitality
- 2018 was another record-breaking year for tourism in the City of Chicago. Choose Chicago reports an estimated 57.7 million visitors to Chicago in 2018, an increase of 19.5 percent from 2013.
- Domestic overnight visitors to Chicago spend an average of $1,093 during their stay, while international travelers spend just over $3,100.
- Overseas travelers account for only 3 percent of total visitors to Chicago. 75 percent of 2018 visitors were domestic leisure travelers, while 22 percent were visiting Chicago on business.
- The average daily hotel rate in 2018 was nearly $213, growing 7.1 percent since 2014.
- Revenue per available room increased 6.7 percent over 2014 to a record $160.
- 94 percent of Airbnb listings in Chicago are outside the Loop.
“Chicago Loop Alliance’s Economic Profile serves as a trusted pulse check manual of the Chicago hospitality and tourism industry,” said Dean Lane, area general manager of Hilton. “In depth reporting evaluating the fluctuation of supply, emerging market indicators and visitation capture published in this Economic Profile is an essential resource to devising powerful commercial action plans that are built to win share throughout the fiscal year.”
“With this report Chicago Loop Alliance delivers valuable local insight on Chicago’s record tourism trends,” said John Curran, VP and general manager of Big Bus Chicago. “Significant hotel development south of the river has begun to shift how visitors move around the city, and more is in the pipeline. That’s big news for Big Bus Tours and other city attractions.”
Key Points: Section 5: Arts, Culture and Education
- Arts and culture are largely responsible for the uptick in evening foot traffic in the Loop.
- Arts and culture in the Loop have an annual impact of $2.25 billion, as cited in CLA’s 2018 Arts in the Loop Economic Impact Study.
- The Loop offers more than 34,500 seats to theater-goers.
- The Art Institute of Chicago welcomed 1.61 million guests in 2017.
- The Loop is home to 22 institutions of higher education, for an estimated total enrollment of just over 41,000 students.
“The Higher Education institutions in the Loop are a vital contributor to the economic life of the City of Chicago, and the data in Chicago Loop Alliance’s Economic Profile proves it,” said Fran Casey, director of community affairs at DePaul University. “Working with Chicago Public Schools and City Colleges, they provide a talent pipeline that builds a strong and diverse workforce for Chicago businesses and nonprofit agencies. In addition, these institutions make significant contributions to the arts in the city through multiple academic programs and events. Having a document like the Economic Profile helps educational institutions like DePaul so that they can continue to thrive.”
Key Points: Section 6: Transportation, Infrastructure, and Open Space
- The transportation landscape is changing in the Loop and beyond. While overall transit ridership is down, ridership on the L in the Loop is up. Rideshare is expanding, and a wave of new technology could forever change the way we move. The Loop is Chicago’s most transit-rich neighborhood, positioning it as Chicago’s premier business location.
- CTA transit ridership across Chicago reached a 25-year high in 2012 with a total of 545 million rides, moving 314 million riders by bus and 231 million via the L.
- In 2017, the CTA saw 64.5 million fewer riders than the 2012 high, all of which is attributed to a decrease in bus ridership.
- Citywide CTA L rides grew by 5.5 percent between 2013 and 2015, but has since leveled off to 2012 numbers.
- Bus ridership in the Loop has declined by 28 million trips between 2012 and 2017.
- Metra boardings and alightings at LaSalle Street, Van Buren Street and Millennium Park station were down 4.2 percent between 2014 and 2016, the last year for which data are available.
- Since Divvy was introduced in 2013, the number of rides has increased every year until 2018.
- Ridership of the Loop Link bus rapid transit was up 2 percent in 2018 over 2017.
- Rideshare is continuing to challenge the status quo of transportation.
- Annually from 2011-2014, revenues from Chicago Riverwalk-related projects averaged $1.2 million. This figure jumped to $4.6 million in 2015, $9.4 million in 2016 and $11.6 million in 2017.
“At Lyft, we're thrilled to be working with the city of Chicago and Chicago Loop Alliance to be a true complement to public transit," said David Katcher, General Manager, Lyft Midwest. "While we're proud of our ridesharing growth, we're equally excited by the fact that nearly three-quarters of our riders take public transit at least once per week. Additionally, we've integrated public transit—including the CTA and Metra—into the Lyft App to show nearby transit lines and schedules, making multimodal transportation that much easier for Chicagoans."
About Chicago Loop Alliance
Chicago Loop Alliance (CLA) is a membership organization as well as the sole service provider for Special Service Area#1-2015, and the Chicago Loop Alliance Foundation produces public art projects and events. CLA’s mission is to create, manage and promote high-performing urban experiences, attracting people and investment to the Loop. For more information, please visit www.loopchicago.com.