Chicago shoppers looking to spend five or six figures on a watch soon will have a new option on the Magnificent Mile, an area where many luxury retailers have been leaving in recent years for nearby Oak and Rush streets.
German watchmaker A. Lange & Sohne has leased 1,409 square feet in the historic Tribune Tower, CIM Group announced this week.
Los Angeles-based CIM and Chicago’s Golub & Co. in recent years have redeveloped the former home of the city’s largest newspaper into luxury condominiums and new retail on the southern end of the city’s best-known shopping corridor.
The addition of the luxury watchmaker and seller, which is part of Swiss luxury retail group Richemont, is another step forward in the redevelopment of the 36-story tower just north of the Chicago River.
But the deal could have broader implications on the mile-long retail stretch where retail vacancy this year has reached record highs.
Although the lease is relatively small on a portion of North Michigan Avenue where there are many large, flagship-type spaces, adding a luxury brand could be a pivotal moment.
Plans to open next year in a corner space along Michigan Avenue and the Pioneer Court pedestrian plaza come after a wave of luxury retail defections on nearby Gold Coast streets, such as Oak and Rush, where high-end brands have clustered together at an increasing rate in recent years.
Luxury goods sellers, including Bottega Veneta, Van Cleef & Arpels, Cartier and Chanel, have moved from the Mag Mile to Oak Street. That pocket of the city has thrived as luxury retailers’ leasing continues surging throughout the country.
It’s not clear whether A. Lange & Sohne’s newly leased space will replace its Gold Coast shop at 11 E. Walton St. or whether the Mag Mile space will be a second Chicago location. The company, whose timepieces can run well over $100,000, did not respond to requests for comment to CoStar News.
Either way, its arrival at 435 N. Michigan Ave. next year could be seen by other luxury retailers as a vote of confidence, according to Sharon Kahan of Odyssey Retail Advisors, one of the brokers who represented the tenant.
“They believe in their brand, and they believe that this is a luxury area,” Kahan said. “They’re obviously bucking the trend, but the amount of foot traffic and car traffic that goes by this space is tremendous.”
The deal comes after recent setbacks, including the closures of two longtime restaurants on the avenue, the Signature Room and the Grand Lux Cafe. Larger tenant defections in recent years have led MetLife, the owner of Water Tower Place, to seek a sale or lease of the top five floors of the vertical mall for new uses such as medical offices.
Follow-up deals could help bring some buzz back to the Mag Mile, according to retail broker John Vance of Stone Real Estate, who was not involved in the A. Lange & Sohne deal.
“It doesn’t really move the needle in terms of vacancy on the avenue, but it is significant in terms of co-tenancy,” Vance said. “It’s good for the avenue. Today, Rush and Oak have all the momentum for luxury retail. If you get more of these deals, that could put the Mag Mile back on the map for these luxury tenants.”
At the neo-Gothic Tribune Tower, the watch manufacturer will join an eclectic mix of retailers that includes the Instagram-friendly Museum of Ice Cream, Foxtrot Market, Blue Bottle Coffee, ear-piercing chain Rowan and eyewear company Krewe.
The redeveloped newspaper building’s 162 luxury condos, other high-end residences in the area and draws such as the riverfront Apple store across the pedestrian plaza bode well for the area’s retail future, Kahan said.
“The look of the building is very important to them, and it’s why they chose to plant their flag there,” Kahan said. “It bodes well for Michigan Avenue.”
For the Record
The tenant was represented by Odyssey Retail Advisors brokers Sharon Kahan and Amy Sider. The landlord was represented by CBRE brokers Todd Siegel, Phillip Golding and Kimberly Wiskup.