REAL ESTATE NEWS

Retail rents on Rodeo Drive surged by 19% in 2024, outpacing rent growth for other high-end shopping districts in the U.S., which averaged 11% in a year over year comparison.

Average rents on the famous strip in Beverly Hills this year hit $1,100 per square foot, according to Cushman & Wakefield’s annual tally of the world’s most lucrative shopping streets.

Only NYC’s Upper Fifth Avenue and Madison Avenue had higher rates among prime U.S. shopping districts, holding steady at $2,000 and $1,250, respectively.

Rodeo Drive continues to add to its packed roster of flagship luxury retail outlets. Stores that chose Beverly Hills for their first U.S. outlets this year include British apparel brands Represent and Hunza G; Italian luxury brand Genny; Silk Laundry, an Australian clothing retailer: French jewelry brand Messika; and Swiss watchmaker MB&F, CoStar reported.

Luxury stores have been growing their footprints on Rodeo Drive, adding cafes, VIP space and private entrances to cater to celebrities, the report said.

As luxury retail rents have skyrocketed, cash-rich privately owned brands have opted to buy property on some of the world’s most famous shopping addresses, including Rodeo Drive and Fifth Avenue.

The largest owner-operator on Rodeo Drive is luxury conglomerate LVMH, the family-run Paris-based parent of Tiffany, Bulgari, Givenchy and Dior, among other brands.

LVMH is building a 48K SF, three-story flagship for Dior on Rodeo Drive that will include a 1,440-square-foot rooftop restaurant. The French retail giant bought the building for $122M in 2016.

In August, LVMH opened the first permanent Givenchy store in Los Angeles, a 4,500 SF space in the Anderton Court Shops complex at 332 N. Rodeo Drive. The retailer is planning to double that footprint next year with a second store, making the location Givenchy’s first flagship on the West Coast.

LVMH also has added shops for Patek Phillipe and Rolex at the former Luxe Hotel at 360 N. Rodeo Drive, a building LVMH acquired for $200M in 2021.

LVMH is planning to convert a former Brooks Brothers store at 468 North Rodeo Drive into a Louis Vuitton outlet. The firm paid $245M to acquire the two-story building in 2018, proposing to convert the site into a 109-key Cheval Blanc hotel.

LVMH’s plan for the hotel was rejected by Beverly Hills voters in a special election last year that overturned the City Council’s approval of a development agreement for the site.

Another owner-operator, Swiss conglomerate Richemont, is renovating and doubling the store space for its Cartier brand in a building at 370 N. Rodeo Drive that Richemont purchased in 2000.

Rodeo Drive has benefited from travel spending that has climbed in California last year to a record of more than $150B, up from the pre-pandemic level of $145B in 2019, according to Visit California.

Source: GlobeSt/ALM