It is likely that this owner simply want to get out of the commercial retail rental market. Walton Street Capital are just selling the retail spaces. The AppleInsider article states that Walton Street Capital intends on keeping the office space property in the nearby tower it has nothing to do with retiring and moving to an island. They are paying "well below" average commercial rent in the same neighborhood. Saying that Apple pays significantly less rent is not misleading. The article over at MacRumors about the same topic provides a little more detail. Or maybe the new owner of the existing property says, "Yeah, let's keep the terms the same rather than let the property go empty and hope we can find a new long-term tenant who will pay more." Perhaps a different landlord down the street would be happy to have a prestigious tenant such as Apple. They are paying less than the average commercial retail rental rates for the area ($400-500), let's say Apple is paying $300. In this case, the new owner of the property might tell Apple that rent is going up to $600/sq. I am not sure how real estate contracts are interpreted in Illinois. Again, this is very commonplace here in California. The old agreement is void so either Renter X needs to negotiate new terms or move out. In a different scenario, let's say Owner B wants to increase the rent to $10,000/month. Owner B gives 60-day notice to Renter X that the building is set for demolition and they have 60 days to move out. Let's say Owner B decides he wants to raze the existing property and build new condominiums this happens all the time. The lease agreement between Renter X and Owner A is now voided and a new contract must be negotiated with Owner B. Let's say Renter X is renting space ($3000 month) for a bar in Owner A's Building A. There's probably a law that states that the previous contract is in effect on a month-to-month basis. Whether it be in residential real estate or commercial real estate, typically the leases need to be renegotiated. At least here in California, if the ownership changes, the contract between the two parties is voided. With the relocation of its flagship, the company will cut rental costs, continuing a trend to "optimize spending" amid an exodus of customers to the Internet and declining consumer purchasing power.While I am not a real estate attorney, my guess is that Apple's contract may need to be renegotiated with the new landlord.Ĭontracts are agreements between two parties, in this case Renter A (Apple) and Owner W (Walton Street Capital). In 2017, the company moved its store to another area, expanding its leased space.Īs for H&M, the company has long been eyeing the space on N. Michigan in 1997 and has been open for about 20 years. Nevertheless, the brand still remains at Mag Mile, unlike the fashion giants Gap, Uniqlo and Banana Republic, which left the retail corridor. After closing in the Mag Mile neighborhood, the vacancy rate, which reached 30 percent after the pandemic, will still increase. The Swedish brand will have to halve its store space from 60,000 to 30,000 square feet by changing locations. is one of the biggest deals in Chicago's retail real estate market in the past few years. H&M is leasing most of the space formerly housed the Apple Store. The fashion brand chose the space, which has been empty for five years, to relocate its flagship store, located four blocks north. Swedish fashion retailer H&M will open a store at the Apple Store former location on North Michigan Avenue in Chicago.
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