Beverly Hills Triangle to Abbot Kinney – JLL Looks at Los Angeles’ Four Urban Retail Corridors

By Houman Mahboubi, Senior Vice President, Retail, JLL

Q: What is a prime urban retail corridor, and how does it differ from a high street?

A: High streets – main strips of high end retail, like Michigan Avenue or Rodeo Drive – have been top targets for investors for years. But shopping districts now stretch beyond a linear street, creating corridors with mixes of brands, restaurants and entertainment. Some of these corridors are existing and established, with a large concentration of high-credit tenants like Upper 5^th Avenue, the Beverly Hills Triangle or Michigan Avenue. Others are emerging, with tenants of varying credit profiles and mixes of local retailers and restaurants. These corridors have emerged organically and are not the product of a single master developer.

Q: Los Angeles is home to four prime urban corridors. Tell us about those.

A: The four prime urban retail corridors in Los Angeles are the Beverly Hills Triangle, Melrose, Third Street Promenade and Abbot Kinney.

Beverly Hills Triangle is the most expensive retail corridor outside of New York City, with an average asking rent of $900-per-square-foot. Having a store on Rodeo Drive has long been a staple of luxury brands’ marketing strategy and retailers like Burberry, Bally and Armani all boast an address in the corridor. In recent years, Beverly Hills has also become a destination for celebrity chefs like Curtis Stone with Maude and Jean Georges at the Waldorf Astoria. Thus, adding world-renowned restaurants to the retail mix, has changed the city’s dynamic and added more desirable nightlife to the area. Brighton Way, which for many years has been the “jewelry and watch block,” has really started to become one of the more premier blocks in Beverly Hills with the opening of LVMH brand Berluti last month at 9533 Brighton Way.

Melrose corridor has benefitted from tenants moving from nearby Robertson Blvd. to the blocks around the intersection of La Cienega and Melrose. With asking rent as high as $300 per square foot, Melrose has attracted retailers like Restoration Hardware, AllSaints, Zadig and Voltaire, Rag & Bone, Ted Baker and Lululemon. Melrose Place made a splash this summer with the highly anticipated opening of French luxury house, Balmain. We’ve also seen investors, especially private developers, quick to purchase assets as soon as they hit the market, keeping average cap rates between 4.5-5.5%.

The expo line connection added nearly 75,000 visitors to Santa Monica from LA, which really boosted the appeal of Third Street Promenade. The main paseo attracts tourists and locals alike, but we’re seeing just one block west on Second Street a fitness hub emerge with Equinox, SoulCycle, Hot 8 Yoga and Orangetheory. New and exciting food concepts, such as Carlos’ Bake Shop, 1212 and the Gallery Food Hall are opening on the Promenade as well, hoping to perpetuate the high foot traffic volumes the street already experiences. The area is capturing asking rents as high as $360-per-square-foot.

 Abbot Kinney went from grungy to boho chic, and is by far one of the coolest blocks in Los Angeles. Rents have increased since 2012 and average asking rents now stand at $215-per-square-foot. The retail landscape has dramatically shifted with more national tenants, like Rag & Bone, Adidas, TOMS, Shinola, Vince and Zadig and Voltaire moving in, and pushing local retailers to relocate to neighboring addresses. The street continues to feature top F&B drivers as well, including Gjelina, Kreation, Intelligentsia, Tasting Kitchen, Salt & Straw, Blue Bottle Coffee, and renowned Italian favorite Felix.

Want to learn more about these four Los Angeles retail corridors? Download JLL’s report.

For comments, questions or concerns, please contact Dennis Kaiser