Commercial Rent Prices Are Finally Recovering In One City Post-Pandemic
Rodeo Drive commercial rent prices have recovered post-pandemic, and this has driven businesses to look for rental opportunities elsewhere in Los Angeles in places like Melrose.
Rodeo drive commercial rent prices is recovering since the pandemic, with less and less retail space available. Luxury brands, already based in Rodeo drive, have been expanding and extending their stores. Also, many new stores have arrived and are waiting to greet happy shoppers.
Clearly, the luxury retail industry and Rodeo drive had finally bounced back from the effect of the pandemic as Louis Vuitton has acquired a two-story building exclusively for their men’s collection that was previously housed within their three-story outlet, which is less than two blocks away. You need to make an impressive profit to rent such a vast space. Even luxury brands won’t rent a space just for show.
The luxury brand Loewe is a new addition to Rodeo drive as they have recently revealed a 3,700-square-foot space just one block away from LV’s new space. Their president has stated that they are happy to become a part of Rodeo Drive, and they believe that the Los Angeles’ retail market is in the top five profitable markets in the world for the Loewe brand.
Loewe is lucky to grab a space on Rodeo drive as the competition to acquire a retail space is high as its vacancy rate is under 5%. The current commercial rent prices for space on Rodeo Drive is $750-$800 a square foot annually. This is a reduction in price compared to rent during the middle of the pandemic. Commercial rent prices increased to over $900 a square foot, which reduced a lot of business in the area.
While Rodeo Drive is world famous for being Los Angeles’s most exclusive shopping area, high-end designers are starting to choose retail spaces in other areas of west Los Angeles. The luxury sector of the retail market is expanding rapidly; brands had to seek retail space outside the legendary street.
As Rodeo Drive is filling up, Melrose Avenue and Melrose Place are becoming increasingly popular for luxury brands. Within the three-block area, you can find a range of retail personalities, from Glossier’s 10,000-square-foot superstore to Lululemon to a range of interior design showrooms.
Both Gucci and Margiela will be adding their names to Melrose Place and Melrose Avenue this summer. The commercial rent prices in this part of Los Angeles will cost an average of $240-square-foot annually. This price has not fluctuated much since the pandemic but is still significantly cheaper than Rodeo Drive. Who knew Gucci was a bargain hunter?
Downtown Los Angeles is the exception to the flurry to pick up retail space as it still hasn’t bounced back from people working at home during the pandemic and businesses moving to the more attractive districts across the city.
While there has been a rush to fill up vacant retail spaces since the pandemic, the future of Rodeo drive and Los Angeles retail space will calm down this year. When all the retail space is full, luxury brands usually stay in a retail space for years to come, which would slow down the acquisition of luxury retail storefronts. But for now, retail is bouncing back, which is a good sign for our economy.
