* 7/1/25 - Across the nation, “new downtowns” are changing cities - Developers hoped to outcompete old city centers, and in many regions, they're suceeding + Fulton favors the bold
Buzz Sawyer
Across the nation, “new downtowns” are changing cities
Developers hoped to outcompete old city centers, and in many regions, they're suceeding
Jul 1, 2025, 6:00 AM CDT
The streets aren’t paved with gold, but they’re clean, edged in plantings and dotted with retailers.
At new commercial developments, often outside cities’ longtime commercial cores, such details have lured office tenants by offering the perks of downtown without the strife and grime that still plagues some major hubs after Covid’s upheaval. Brand-new buildings stack high-end office space above outposts of sought-after restaurants and shops. Investment in landscaping and events is obvious. Would you rather work here, the shiny new “downtowns” seem to say to the consultants and lawyers, or in a building in the heart of “real” downtown, where storefronts might be empty and streets deserted or filthy?
The question isn’t a thought exercise: Hundreds of millions of square feet of commercial leases will expire in the next few years, and as their occupants decide where to go next, many are looking to a handful of these new neighborhoods. They include Fulton Market in Chicago, Century City in Los Angeles, Uptown in Dallas, Santana Row and Mission Rock in the Bay Area and Hudson Yards in New York City.
Developers planned or opened some of these areas before the pandemic, and today they are in a prime position to benefit from the cycle of malaise — without workers, retailers couldn’t stay open, but without retailers, workers didn’t want to be downtown — that transformed some downtowns. Even though business improvement districts clean the streets, city initiatives support small businesses and owners rent out first-floor spaces at free or reduced rent, bringing back the overall energy is not easy.
These challenges disappear at new developments. Sometimes owned by a single entity or a small group of partners, the areas can curate a package for tenants that goes beyond the cubicle, hiring private security and street cleaners, recruiting exactly the right retailers and restaurants and even paying for their build-outs. To make their new neighborhoods feel authentic, rather than like some cleaned-up suburban simulacrum of downtown, they have tacked on pharmacies, delis and dive bars in addition to glamorous amenities.
With the office market still weak in most places, the new competition could set a model for operating that “old” downtowns could follow. Or, their lustre might just wean more tenants from downtowns, further hollowing out traditional city centers.
Reporters in five of The Real Deal’s markets analyzed new or rehabilitated commercial developments and how they are fitting into their regions.
—Emily Landes
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Fulton favors the bold
Fulton Market was originally a meatpacking district. By the 2010s, an early wave of warehouse conversions led the old guard of food processors to cross paths with a new generation of tech workers by day and bar hoppers by night.
Then, the pandemic fast-tracked the neighborhood’s metamorphosis.
As interest shifted away from the Loop’s colossal skyscrapers, developers became even more interested in transforming warehouses into loft-style offices. Now, most of the food-related business that happens here is done by office workers at the corporate headquarters of companies like McDonald’s and snack food maker Mondelez International.
The buzzy neighborhood feels worlds away from the Loop but is located only about half a mile west of it. Covering less than a square mile, it is bound by the Metra commuter rail tracks to the north and Washington Boulevard to the South. Development first began near its eastern edge along I-90 and is spreading to its western edge at Ogden Avenue.
Local restaurants and national retailers like Allbirds and Lululemon now line the main throughways of Randolph Street and Fulton Street. Sterling Bay, an early visionary of the neighborhood, began work on one of the only office buildings to break ground in the country in 2022.
The developer completed construction on the building at 360 North Green Street in 2024 and it was 90 percent leased upon opening.
And that building’s success is not an anomaly. Fulton Market’s office vacancy rate was 15 percent in the first quarter of 2025, well below the overall downtown rate of 26 percent, commercial real estate services firm Bradford Allen found.
Now, a multifamily push is shepherding in the latest wave of development in Fulton Market. More residents in the area are creating the “live, work, play” environment that real estate players like to brag about to lenders, investors and prospective tenants.
In 2021, Chicago City Council relaxed zoning restrictions in the area that were originally intended to protect industrial jobs and keep residential development out. With the go-ahead to build apartments north of the main thoroughfare of Lake Street, several projects took off.
On one corner, Fulton Market Cos’ Alex Najem is planning two multifamily projects totalling over 1,000 units.
“We’re going to own Fulton Market,” Najem said at a recent TRD panel. “We allowed other people to go do their dabbling in the Sun Belt states during Covid … I know the politics here. I know the zoning. I just know the market … There’s tons of people here and lots to do here.”
Meanwhile, the Loop is struggling to shed its more buttoned-up reputation, and even its most established office tenants are readying their exits.
Law firm Greenberg Traurig relocated from the Loop to Fulton Market and, notably, did not downsize. It took a 90,000-square-foot space at Sterling Bay’s 360 North Green. When global law firm Norton Rose Fulbright eyed an expansion into Chicago, it chose 1045 West Fulton Market Street.
Still, Fulton Market’s wins don’t seem to be completely cannibalizing the Loop. On its northern and eastern ends, which are bordered by amenities like the River Walk and Millennium Park, some momentum is picking up.
Last year, Prime Group and Capri Investments broke ground on their redevelopment of the Thompson Center, a former state government building that Google plans to take over as its Midwest headquarters. Google paid the development venture $156 million for the initial work on the project.
But on the southern end of the Loop, by Chicago’s iconic Board of Trade Building, landlords are struggling to attract tenants. Even an apartment building that was an early adopter of the office-to-residential conversion model is facing foreclosure.
“Maybe the city needs to act even more boldly in the Loop than in Fulton Market and close LaSalle Street permanently and turn it into a park,” longtime Fulton Market investor Phil Denny said. “As surreal as that would seem, I think it would go a long way toward convincing residents that there’s a commitment to doing something that’s big and different.”