Brokers see retailers flock back to Melrose Avenue

E-commerce brands, restaurants bring life back to West Hollywood strip of famed shopping row

Carine Mamann, CBRE’s Andrew Turf and Ryan Gurman (Carine Mamann, Cushman & Wakefield, CBRE)
Carine Mamann, CBRE’s Andrew Turf and Ryan Gurman (Carine Mamann, Cushman & Wakefield, CBRE)

It wasn’t hard to notice a smattering of “For Lease” signs on empty storefronts around Melrose and La Cienega during the pandemic.

You have to look harder these days. It’s been a slow shift, but for-lease signs have been replaced with business name plates over the last few that are in place or on the way, with a crop of new retailers and restaurants resetting the scene.

The leasing activity is centered along the West Hollywood stretch of Melrose Avenue, from San Vicente to La Cienega Boulevard, which boasts more than 70 storefronts and restaurants, according to retail brokers interviewed by TRD.

“It’s been nuts, to be honest with you,” CBRE’s Andrew Turf, who represents luxury retailers. Luxury and e-commerce retailers have seen upticks in revenue, prompting them to expand into physical space, he added.

At the end of 2020, in the midst of county-ordered closures, more than 20 stores along Melrose Avenue between San Vicente and La Cienega were vacant or available for lease, according to data from Newmark and LoopNet. This month, six storefronts between the same stretch were available for lease on LoopNet.

Over the last six months, 8428, 8500, 8507, 8585, 8607, and 8755 Melrose Avenue have all been leased, among other storefronts, according to brokers and street signs along the strip. Just off Melrose Avenue, 8483, 8478 and 8408 Melrose Place have also been leased in recent months.

Independent clothing boutique Wolf and Badger is opening up at 8500 Melrose Avenue — a space formerly occupied by skincare company Bluemercury, according to Cushman & Wakefield’s Carine Mamann. The space is located in the same building as luxury consignment retailer The RealReal.

At 8428 and 8507 Melrose Avenue, Mamann has also leased up storefronts previously occupied by clothing retailer Theory and MAC Cosmetics, respectively.

“There’s a lot of activity happening on Melrose,” Mamann said.

Rents have also made a comeback. At the beginning of the pandemic, retail rents for storefronts along Melrose dropped to $180 a foot per year, according to Mamann. Now they’re generally over $200 and ranging up to $300 per square foot.

The pivot to physical

E-commerce brands, known for selling their products online and advertising on social media, have been driving this uptick in retail activity. By Far, an Instagram-cult brand known for colorful handbags and kitten heels, is opening a store at 8408 Melrose Place — it’s first ever physical store.

Something Navy, another clothing retailer known for marketing on Instagram, opened up its first L.A. store six months ago at 8478-B Melrose Place. In an adjacent storefront, ear piercing studio Studs opened there just a month prior.

Many direct-to-consumer brands, including Something Navy, are signing leases through a third-party, like Leap. Chicago-based Leap connects brands with storefronts, essentially wholesaling the space and allowing retailers to check out the market by leasing for relatively short terms. Brands also pay Leap daily operating fees.

Leap also signed a lease at 8402 Melrose Avenue for ASTR the Label — another Instagram-famous online retailer.

In November, Glossier, a beauty brand valued at more than $1.2 billion, opened a 10,000-square-foot flagship at 8523 Melrose Avenue, moving from 1,200-square-foot space at 8407 Melrose Place.

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Glossier, which has physical stores in New York, London and Miami, chose Melrose to open its first L.A. store in 2018 and decided it wanted 9,000 more square feet — even after the pandemic.

“These brands are realizing they need a physical presence,” CBRE’s Ryan Gurman said. “You can captivate an audience online, but you can’t replace the touch and feel of a physical product.”

A restaurant scene

The West Hollywood stretch of Melrose Avenue is also set to see a number of new restaurants, which brokers hope will be magnets that keep people coming back to the retail in the area.

“There’s tons of demand for restaurant space there,” Lorena Tomb, the CEO of brokerage Urban Lime Real Estate said. “West Hollywood is an area where restaurants have done really well.”

The Butcher’s Daughter, a popular, wholly vegetarian restaurant with three New York City locations and an outpost on Abbot Kinney Boulevard in Venice, is opening a new location at 8755 Melrose Avenue this summer, according to a source familiar with the deal and liquor licenses filed with the city of West Hollywood.

Another New York transplant, Catch, is opening a 20,000-square-foot steakhouse this year on the corner of Melrose Place and La Cienega Boulevard. The restaurant was set to open last year, but has faced delays.

“You only really had Urth Caffé before,” Mamann said, who just leased 8607 Melrose Avenue, formerly a Le Pain Quotidien, to L.A.-based Zinc Cafe & Market, which has locations in Laguna Beach, Corona del Mar and the Arts District. Zinc is planning to open the Melrose location this summer.

The demand has left Melrose with a lack of ready-to-go, turnkey restaurants.

“Good luck finding a second-generation restaurant,” Gurman at CBRE said, referring to properties that are already outfitted with a proper kitchen.

Not the whole city

Like Melrose, a number of walkable retail-focused streets are seeing an uptick in leasing activity.

Malibu, Abbot Kinney Boulevard in Venice, parts of Beverly Hills including Rodeo Drive and Sunset Boulevard in Sunset Lake, are all seeing an increased interest from potential tenants, CBRE’s Andrew Turf said.

Only one storefront is available for lease on Rodeo Drive, according to LoopNet.

But not every part of L.A. is seeing such interest. Turf called Downtown Los Angeles a “soft spot” in the city, with retailers uninterested in leasing storefronts in the area.

When asked whether he’s seen any leasing activity in Downtown L.A. in the last few months, Turf responded: “Zero. Absolutely zero.”

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