Wow! It just gets better! Chanel recently made an exciting and staggering move by purchasing their Rodeo Drive store, that they had been leasing, for $152 million, or $13,217 a square foot — a record price on a square-foot basis for retail space in California, according to The Los Angeles Times!!! What does it mean that we have just experienced the highest sale ever on one of the world’s most iconic shopping streets? And how does it compare to the recent $100 million+ listings on the Westside?
Let’s take a closer look.
Without question, the most recent retail storefront sales on Rodeo Drive have been to major international players. Luxury fashion houses like Chanel and LVMH Louis Vuitton Moet Hennessy (which set a record in 2013 when it bought its 7,100-square-foot property for $85 million, or $11,971 per square foot) have continued to raise the bar for Beverly Hills. These retail real estate purchases, most likely driven by a desire for “investment and brand-building,” bolsters the longevity of Beverly Hills — not only as a cornerstone for the international value buy, but as a premier international destination. After all, if an iconic international brand like Chanel plans to have a presence on Rodeo Drive for the next 150 years, then what does it mean for the many international residents and local homeowners who have real estate investments here?
As more international and domestic investors look for places to invest their hard dollars and move their money from the stock market into real estate, there is tremendous upside potential for Los Angeles, and certainly for Westside real estate! Record sales and listings have been exploding all over the Westside of Los Angeles this year. In the last few months especially, there has been a great deal of publicity surrounding several development opportunities in which the price tag was over $100 million. There are three development sites in Bel Air being quietly marketed for $115 million each. Let’s be clear — there are no houses on these sites…it’s just the dirt and renderings! And who can forget Nile Niami’s 4-acre Bel Air estate that is scheduled to hit the market in 2017 for $500 million, called “The One”! If Niami has his way, that sale will easily trump any retail storefront sales we’ve seen on Rodeo Drive recently!
Despite these high level purchase opportunities, the most active part of the Beverly Hills market remains in the $1 million to $3 million range. Entry level purchasers continue to reaffirm the glamour and allure of Beverly Hills. This is an incredible time to enter the real estate market at the entry level because the pressure at the top gives buyers confidence in their investment and their desire to move up. Chanel, LVMH and other major international players continue to prove that the interest and demand for our fabulous city is here to stay!!!
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