California Apparel News

With people back in the stores again, retail vacancies on some of Los Angeles’ major shopping streets are shrinking and rents are falling into reasonable territory.

“Earlier in the year, there was a higher vacancy rate,” said Philip Klaparda, a senior associate with Dembo Realty in Beverly Hills. “I feel things are trending stronger in the fourth quarter. It is a combination of tenants coming out of the shadows and the landlords being more reasonable.”

Meanwhile, the 3.3 percent warehouse-vacancy rate in Los Angeles County is up a smidgen from last year’s 3.2 percent. However, that vacancy rate is one of the lowest in the nation, said Nancy Sidhu, chief economist at the Los Angeles County Economic Development Corp.

With cargo activity ramping up strongly at the Port of Los Angeles and the Port of Long Beach, the warehouse-vacancy rates in San Bernardino and Riverside counties have come down handsomely. They are now at 10.8 percent, an improvement over last year’s all-time high of 12.8 percent.

When it comes to retail space, a stroll down Melrose Avenue, an eclectic mix of high-end and not so high-end shops, reveals more occupied storefronts. The vacancy rate on the thoroughfare hovers around 10 percent, a 50 percent reduction from last year’s 15 percent, Klaparda said. Retail rents are in the range of $3 to $4 a square foot, down slightly from last year.

American Apparel made a major expansion on Melrose a few months ago, snapping up an additional 2,000 square feet to beef up its presence with a 6,000-square-foot emporium, one of the largest in American Apparel’s stable of stores.

And within the next 30 days, English designer Vivienne Westwood is set to open a store—her only one in the United States—on Melrose Avenue near Flores Street.

Space is a little more precious on Robertson Boulevard’s two blocks of premier shopping. The vacancy rate is at a tight 5 percent, down from 10 percent last year. Store rents reflect that. They are at about $12 to $18 a square foot, instead of last year’s rates of $10 to $18, Klaparda said.

Third Street has a low 5 percent to 7 percent vacancy rate. And store space is just as scarce on Rodeo Drive, where retailers, who are paying around $25 to $35 a square foot, have been playing musical chairs. Agent Provocateur, the edgy lingerie line, has signed a lease to move into 2 Rodeo Drive, the faux European shopping street at the base of Rodeo Drive.

“You had a good little flurry of activity this year,” said Chuck Dembo, a partner in Dembo Realty, who does a lot of deals on that street.—Deborah Belgum