Despite the ailing economy, retail real estate is still going up in some areas. CB Richard Ellis VP Jay Luchs told WWD in regard to Rodeo Drive, which pulls in $1.3 billion in annual sales: “As bad as times are and as much as the retail industry is going to feel an effect, there is just so little available space that rents are still going up...Rodeo Drive, Robertson Boulevard and Malibu are all very strong.” According to Luchs, rents on Rodeo range from $27-$50 per square foot, while rents on Robertson between West 3rd Street and Beverly Boulevard are $25-$28 per square foot, and in Malibu rents average between $20-$25 a square foot.
The fashion trade quotes disturbing statistics from the International Council of Shopping Centers, which predicts "that retail closures might reach almost 6,500 this year — up 41 percent over last year, and the most closures since 2001 when more than 7,000 stores were shuttered. There were 2,122 announced store closures in the first quarter of 2008, according to the ICSC."
Regarding areas such as Melrose Avenue and Melrose Place, Robert Cohen Executive VP of RFK, a retail leasing, investment sales and consulting firm, told the pub: “Emerging markets that never really caught on or reached their potential are really going to take a hit.” Luchs bolstered this point, noting "rent prices have cooled on Melrose Avenue ($8 a square foot) and Melrose Place ($15 a square foot)."
· Letter from L.A.: Pockets of Strength [WWD, subscription req]
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