Tesla has room for a passenger in its Gold Coast retail lease.
Elon Musk’s electric car company hired ARC Real Estate to sublease its 5,400-square-foot showroom space at 901 North Rush Street, six years after opening the spot, Crain’s reported.
Tesla’s lease expires in March 2027, with options to extend it for two more five-year terms. It’s unclear why the Austin-based company is shuttering its doors, but during the pandemic, Tesla has adopted a strategy of closing showrooms in shopping malls and focusing on less expensive locations.
If Tesla vacates 901 North Rush, which is part of the 900 North Michigan Shops mall, its showroom at 1053 West Grand Avenue in River West would be its last remaining in Chicago.
Another nearby storefront at the corner of Rush and Delaware streets became available when women’s apparel retailer Intermix closed its doors earlier this year at 901 North Rush. But given the strong performance of Gold Coast’s retail sector, both storefronts could be reloaded sooner than some of the empty spaces on the Magnificent Mile.
“The Gold Coast market is exceptionally strong right now, bordering on frothy,” John Vance of Stone Real Estate told the outlet.
There’s still problems for landlords, though. Fred Latsko, the landlord of Intermix’s former space, has filed an eviction lawsuit and asked the retailer to pay $375,000 in late rent, the outlet reported. Latsko filed another lawsuit this year over what he says is foot-dragging by Parisian high-end bag maker Goyard to move into a space it agreed to lease on Oak Street.
But multiple tenants are considering backfilling the Intermix space, Latsko told the outlet, underscoring the Gold Coast’s comparative advantage to the Mag Mile’s retail market, which continues to struggle after tenants such as Verizon, Gap, Banana Republic, Uniqlo, Macy’s and Timberland left amid the pandemic.
Several notable retail trades have closed in the neighborhood since last year. Slightly west of Rush, Goldman Sachs in August sold an 18,000-square-foot space leased to CVS at 1165 North Clark Street for $21 million to a low-profile investor. And last month, an affiliate of Stone Street Partners bought the 5,400-square-foot spot at 1003 North Rush Street from Invesco for $12 million. That space is fully leased by apparel retailer Vuori.
— Quinn Donoghue