The retail apocalypse is real — except, apparently, when it comes to Rodeo Drive.
While vacancy rates are on the rise at some area malls, and some big-box retailers have shut their doors, things are looking bright on Beverly Hills’ most famous street.
Rodeo’s three-block stretch of shops, home to brands like Gucci, Dior and Chanel, looks to be immune to the havoc wreaked on the retail landscape by growing ecommerce appetites and Amazon.com Inc.’s promise of fast delivery.
“Rodeo Drive has not been affected,” said Carine Mamann, an executive director at Cushman & Wakefield Inc. “If anything, it’s the shining star of the U.S. — a lot of tenants on the street have been renewing their leases, and there’s a ton of construction going on on the street.”
Houman Mahboubi, an executive vice president at Jones Lang LaSalle Inc., agreed that Rodeo has seen multiple renewed leases and expansion by tenants.
“The ones that have left have been the ones that really shouldn’t have been on the street to begin with,” he said.
Brands renovating stores on Rodeo include Gucci, Dolce & Gabbana, Cartier, and Chanel, which will soon start construction “on one of the largest Chanel flagships in the world,” according to Mamann.
“All of the luxury brands are investing in Rodeo Drive,” she added.
The renovations are par for the course, said Mahboubi, who explained that many of the big companies renovate and give their stores a fresh look every 10 years or so.
During the renovations, he said, most retailers move to temporary locations nearby.
Jay Luchs, a vice chairman at Newmark Knight Frank, said many shops renovate even more frequently, as often as every three to four years.
Some brands, he said, have purchased their buildings before undergoing large-scale overhauls.
“Sales, the street not being that big, the contribution and dedication that brands have to owning buildings, and the uniqueness of brands and the street — Rodeo has that,” Luchs said.
Rents vary widely but are “very healthy,” he added, saying that vacancy rates are consistently low.
Real estate on Rodeo Drive hardly ever becomes available. When it does, it’s a hot commodity.
“Very rarely does a building (come up) for sale on Rodeo Drive. If a building does become available, you jump on it that second,” Mamann said.
Most buildings, she added, are sold off market.
“The brands are buying for their own needs,” Luchs said. “They are not buying to then rent them out and make money as a landlord. They are buying them to control their destiny.”
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