Beverly Hills Retail Record Broken by Hermès Purchase

Rodeo Drive could get more orange after a record-setting retail acquisition on the world-famous corridor.

Hermès has been revealed as the buyer behind what Wall Street Journal said is the largest-ever retail real estate purchase on Rodeo Drive, the publication reported. The luxury French brand spent $400 million to buy 338 North Rodeo Drive, picking up the roughly 25,000-square-foot location last summer as part of its acquisition of an affiliate of former owner ECA Capital Limited.

The storefronts are currently occupied by Tom Ford, Moncler and Balenciaga. Hermès’ plans for the site are not clear, though it might be a while before an Hermès store can open there, as the current tenants still maintain leases with several years left. Hermès already has a store a block away at 434 North Rodeo Drive, though it’s about half the size of the 338 North Rodeo site.

The deal is believed to be the second-priciest sale in Beverly Hills history after British developers Nicholas and Christian Candy spent $500 million for a former Robinsons-May department store at 9900 Wilshire Boulevard in 2007. The 338 North Rodeo sale sets a one-property record for the Rodeo retail corridor.

Other significant purchases on the street in recent years include LVMH’s $245 million purchase of a 22,300-square-foot, two-story building at 468 North Rodeo, hotelier Efrem Harkham’s $200 million sale of a 43,000-square-foot hotel and retail site at 360 North Rodeo and Crown Equity’s sale of two storefronts spanning 11,600 square feet at 457-459 North Rodeo Drive for $122 million.

Hermès already owns its store’s current Rodeo Drive location, which it purchased in 2011 for $75 million as its first U.S. real estate acquisition, Luxury Retail Market reported. The brand rents many of its other store locations, including its New York City flagship on Madison Avenue.

Since the pandemic, retailers have increasingly had to compete for real estate in Beverly Hills as luxury companies have been purchasing properties and leaving less available space for others. Asking rent prices have increased nearly 50 nearly since 2019, per CBRE data cited by the Journal. “What you see now on Rodeo Drive is not only a commitment by the luxury brands that are able to buy their real estate, but you’re seeing the buildings get much bigger,” Newmark’s Jay Luchs, who brokered the 338 North Rodeo deal, told WSJ.

— Chris Malone Méndez