Chicago's Foxtrot Vacancies Spark Retail Rush for 51,000 Sq Ft

Key Takeaway

• Foxtrot Market's nationwide closure, including 15 Chicago locations, opens 51,000 sq ft of prime real estate for eager retailers.
• Food and beverage retailers are top candidates for these spaces in densely populated areas with low retail vacancy rates.
• Despite $160 million in venture capital, Foxtrot faced financial issues and mismanagement claims, leading to a foreclosure sale by JPMorgan Chase.

The Foxtrot Market Fallout: A Real Estate Opportunity

The sudden closure of Foxtrot Market's 33 locations last month has sent ripples through the retail and real estate sectors, particularly in Chicago, where 15 of these stores were based. This unexpected move has not only left employees and suppliers in a lurch but has also introduced a significant amount of prime real estate back into the market. With approximately 51,000 square feet of retail space now vacant in some of Chicago's most desirable neighborhoods, the event has created a dual narrative of challenge and opportunity within the city's retail landscape.

Prime Locations Up for Grabs

The appeal of the now-vacant Foxtrot Market stores lies not just in their considerable total square footage but in their individual locations. Averaging around 3,400 square feet each, these spaces are nestled in densely populated areas, making them highly attractive to a wide range of prospective tenants. The expectation of a scramble for these coveted spots is high, particularly among food and beverage retailers, who are seen as prime candidates due to the locations' low retail vacancy rates. This surge in demand could potentially allow landlords to command higher rents, reshaping the retail dynamics in these neighborhoods.

A Varied Future for Vacant Spaces

The diversity of the submarkets affected by Foxtrot's closure suggests that the future uses of these spaces could be quite varied. While some may continue to serve as retail locations, others could be repurposed, depending on the strategic goals of the property owners. This flexibility in potential usage underscores the complexity of the real estate market in Chicago, where the motivations of ownership groups will play a crucial role in determining the next chapter for these prime locations.

Underlying Struggles and Market Implications

Foxtrot Market's abrupt exit from the retail scene is indicative of deeper financial woes, despite the company having raised $160 million in venture capital. Falling short of sales goals and facing increasing financial pressure, the attempted merger with Dom’s Kitchen & Market was a last-ditch effort to salvage the business. Now, as JPMorgan Chase moves to recoup its investment through a foreclosure sale, the situation highlights the precarious nature of venture-backed retail ventures and the potential fallout for employees, suppliers, and the broader market.

Management Quotes

• John Vance, Stone Real Estate:

  "The closed Chicago stores, averaging about 3,400 square feet, are especially appealing to prospective tenants due to their 'solid locations' in densely populated neighborhoods."

• Danny Jacobson, CBRE:

  "Every ownership group is going to have a different motivation driver as it relates to the decision they make on who the ultimate user is that fills that space."