Top retail districts show strength in first half
The economic downturn took a toll on landlords in the country’s most elite urban shopping districts such as Fifth Avenue and Rodeo Drive, but merchants came bustling back in the first half of 2011, a real estate brokerage said.
“The pronounced decrease in rents and increase in vacancy rates over the past few years have created opportunities for well-positioned retailers,” said Nina Kampler of CB Richard Ellis. “With tightened availability in the best locations, asking rents either stabilized or rose and tenants have been willing to pay top money for the prime spaces.”
New York’s Fifth Avenue continues to be the top retail destination in the United States, with high national and international brands actively seeking sites. Notable transactions in the first half of the year include Zara’s purchase of the former NBA store at 666 Fifth Ave. for about $400 million.
The Beverly Hills retail market remains tight with little availability along Rodeo Drive. By the end of the 2011, the blocks of Rodeo should be 98% occupied with asking rents of $500 per square foot per year. The newest tenants to the market include Lanvin, Agent Provocateur, Vertu and Richard Mille.
The volume of leases in San Francisco’s Union Square district picked up in 2011 while rents remained flat, Kampler said. Much of the leasing activity has moved south toward the Westfield San Francisco Centre on Market Street, which recently reported annual sales of $679 per square foot, nearly double the national average for malls.
-- Roger Vincent
Photo: Westfield San Francisco Centre on Market Street. Credit: Los Angeles Times