One healthy sign of economic recovery: retailers expanding brick-and-mortar locations. Online resale luxury retailers The RealReal has signed a 2,200-square-foot lease at 200 26th Street in Santa Monica. The lease is an expansion of the company's in-store presence in Southern California. It already has locations in Orange County and West Hollywood.
The new store at 26th and San Vicente is adjacent to Brentwood Country Mart and surrounded by a mature retail and dining hub in Los Angeles. Nordstrom Local, goop, Theory, Christian Louboutin and James Perse all have locations nearby. Kennedy Wilson Brokerage's Ed Sachse and Christine Deschaine negotiated the lease transaction on behalf of the landlord.
This is not the first sign of a retail rebound in the luxury market. In June, George Chamoun acquired a 4,900-square-foot retail property at 9549-9551 Wilshire Boulevard in Beverly Hills' Golden Triangle for $8.2 million. Chamoun is an owner occupier and plans to house his jewelry business in the store. JLL's Houman Mahboubi and Devin Klein represented Chamoun and the seller, Ascot Chang USA, in the deal. At the time, Klein said the deal was a sign that "Beverly Hills is bouncing back with a vengeance."
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The single-tenant market has also shown signs of retail activity. In September, Newmark brokered the sales of three single-tenant retail properties in the Los Angeles area for a total of $100 million. A Home Depot, an Amazon Fresh facility and a Chick-Fil-A were the three properties to trade hands in separate transactions.
Through the midyear, national retail rents were on an upswing. Effective retail rents grew by 0.1% in the second quarter, a sign experts from Moody's Analytics say shows a "significant" lack of stress, considering typical trends in the sector. The uptick has "at least temporarily, moderated the glut of negative sentiments across analysts and industry stakeholders," Moody's Thomas LaSalvia said in an analysis of Q2 CRE data. The overall vacancy rate for retail in Q2 clocked in at 10.5%, while asking rents were $21.33 per square foot and effective rents came in at $18.59 per square foot.
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Kelsi Maree Borland
