Every city has its prime retail destinations – the places where locals and tourists flock to eat out and buy the latest fashions from a wide range of brands.
Indeed, they have a special place within the retail sector. “With consumers more distracted than ever, there are fewer platforms through which mainstream retailers can communicate to large numbers of people,” says James Cook, Director of Retail Research, JLL. “Prime urban corridors are unique hotspots of the highest demand, and that continued demand makes the properties within them sensible for long-term investments and leases.”
Many big U.S. cities have more than one district, some of which will be established and some of which are emerging. “Whether it’s New York’s Meatpacking District or San Francisco’s Hayes Valley these emerging prime urban corridors have more local retailers and restaurants and feature a growing number of national brands,” adds Cook.
Check out the slideshow to find out more about some of the rapidly evolving urban corridors in North America’s biggest cities.
Boston – Quincy Market
With its mix of local shops, international brands, street performers and numerous eating options, Faneuil Marketplace is a popular stop on the city’s tourist trail. Purchased in 2014 by Ashkenazy Acquisition, who will invest up to $60 million in property renovations over the next few years, it’s pulling in brands such as Uniqlo, which opened its Boston flagship here in 2015. A new, contemporary glass-enclosed Sephora store in the northern corner of the market opened in early 2017.
Now more pop-ups are moving into the area while the newly constructed retail space of 888 Boylston Street includes other experiential and interactive retailers - Eataly, Tesla and Under Armor. Unlike before when Newbury St dominated most shopper’s attention, Bostonians and tourists are more likely to venture towards the newly constructed high-end retail space on Boylston Street.
Los Angeles – Abbot Kinney
Named the coolest block in Los Angeles by GQ in 2012, Abbot Kinney has changed dramatically in recent times. Although it still maintains its boho-chic style, national brands such as Rag & Bone have increasingly moved in. With rents rising, local retailers such as cycling studio YAS and boutique Mona Moore are heading north or moving further east across Venice Boulevard.
The area’s growing popularity has led investors to hold on to retail assets. While large scale transactions are rare, small scale purchases, like the sale of Wylie Wilson located at 1301 Abbot Kinney between family ownership and private partners for $6 million in late 2016, are becoming more frequent.
Miami – Design District
Just 15 years ago Miami’s Design District was a dilapidated collection of low-rise textile and furniture factories and warehouses. Today it’s been transformed into a place where a curated collection of luxury retailers such as Christian Louboutin, Burberry and Hermes, art galleries and restaurants aim to provide an innovative and artistic luxury shopping experience. Events like Art Basel and Design Miami have put the district on the map with retailers hosting events and sponsoring parties. The area draws in high-end clientele from Miami Beach, Coral Gables and Coconut Grove, as well as well-heeled tourists from Latin America, Europe and Asia. Many tenants see clients by appointment, which leads to more sales per visit.
Mexico City – Roma
One of the older neighborhoods in the city, Roma is enjoying a new lease of life amid ongoing renovation and redevelopment. It’s now carving out a niche as a shopping hotspot home to many local designer boutiques. Independent restaurants are also setting up shop in the area, often driven by Mexican chefs who’ve honed their culinary skills internationally and then returned with those global flavors to their home country. Big names from the retail world are starting to pay attention although they’re still biding their time.
New York - Meatpacking District
The Meatpacking District has evolved from being a late night restaurant and bar district to a home for boutique retailers – before the national retailers moved in. Samsung opened a flagship store in 2016, which doesn’t sell goods but instead serves as a brand experience. Restoration Hardware will open in mid-2017 with 80,000 square feet of retail space and a hotel. With demand for space high, investors are always looking to grab their piece of space within the corridor. L3 Capital, for example, closed on retail space at 34 Gansevort in 2016 for $19.5 million, purchasing from Sitt Asset Management.
While the Meatpacking Corridor is still emerging on an international level, it may reach critical mass with the completion of the huge Hudson Yards development to the north, with crowds of visitors flowing to and from Hudson Yards along the High Line.
Toronto - Queen Street West
The Queen Street West corridor is known for appealing to younger shoppers. The three-story Drake General Store flagship, which opened in 2016, boasts a mix of classic and modern goods with an emphasis on Canadian designers. Yet like many emerging corridors, Queen Street West is feeling the pressure of higher rents that comes with a rise in popularity. It also faces the limits of development restrictions aimed at preserving the authenticity of its storefront environment. Due to these restrictions, the growth that other markets experience from office or multifamily development is limited. Nevertheless, Queen Street West continues to see its retail area expand, with new activity west of Bathurst Street, including popular luxury-lite brand, Kotn, along with longstanding independently owned boutiques, cafes and restaurants.
Chicago – Fulton Market
Once a hub for meat distribution, Fulton Market is now full of hot restaurants and upscale bars with many industrial properties also being converted in offices for the likes of Google and McDonalds. As the first wave of retailers test out the corridor, the second wave is cautiously eyeing the market. CycleBar is set to be the first boutique fitness concept in the area while Limitless High Definition Coffee & Tea, a new concept from the founder of Protein Bar, is opening its first flagship in the summer of 2017 in the Fulton Market corridor. Investors are also paying attention. With the likes of Madison Capital taking an interest, Fulton Market is primed for a growth not unlike that of New York’s Meatpacking District.
Washington DC - 14th Street
One of the city’s youngest, most vibrant emerging corridors, 14th Street is a hub for nightlife, restaurants and bars with local eateries like Le Diplomat, Pearl Dive and Barcelona lining its streets. Higher-end multifamily developments have sprung up in the last decade which in turn boosted its retail scene and will continue to drive diversified demand and rent growth.
For now, 14th Street has fewer global or national retail chains than others, but the number is growing. New arrivals include Shinola, Madewell, lululemon, Filson and J.Crew Men's Store, which all have a target demographic of young twenty and thirty-somethings. As more name brands migrate to the corridor, some of its trendy restaurants may be pushed out when rents increase.
San Francisco - Hayes Valley
One of the most desirable neighborhoods in San Francisco with nearby venues like Symphony Hall and the Performing Arts Center, Hayes Valley has a steady stream of upscale locals and visitors attending performances. National and international retailers are eager to find space, with well-known brands like Warby Parker and Marine Layer first to the draw. Leasing is competitive, with few spaces left to rent and retailers who can’t find available or desirable space are locating adjacent to the trade area. Meanwhile, continued residential development within the area and in nearby neighborhoods, such as Mid-Market, is increasing foot traffic to the corridor. As a result, retail property owners recognize the dynamism of the area and are thus holding onto investments.
Vancouver – South Granville
Once known primarily for its local restaurants, galleries and boutiques, the South Granville corridor has begun attracting international retailer names. Now evolving as a hub for home décor and kitchenware, retailers here include Pottery Barn, Restoration Hardware, West Elm and Williams-Sonoma, along with a slew of independent furnishing boutiques. The growing roster of lifestyle brands is well suited to meet the needs of its educated and affluent workforce. In the summer of 2016, Le Creuset joined the tenant mix while Kohler opened its first Canadian Signature store, with 5,000 square feet of displays with working water and electric features.
Philadelphia – Market East
Market East’s fortunes are on the rise after years of neglect. Long anchored by Macy's, the area had otherwise languished until efforts by Goldman Properties to bring new tenants to 13th Street took effect. New local retailers helped to create a buzz to entice national retailers, and now the area is seen as the best area to supply Philadelphia's growing CBD with larger format retailers, as well as traditional retailers which are looking for more affordable options than the Walnut Street corridor.
Market East welcomed Center City's first Target last year, and interest is strong from previously suburban focused retailers, such as MOM's Organic Market, Design Within Reach, and Iron Hill Brewery, looking to tap into a swelling millennial and empty nester population. With nearly one million square feet of new or renovated retail space delivering between 2017 and 2019, leasing activity is achieving a pace not seen in decades. Retail real estate sales are likely to pick up as the area carves out its position as a major retail hub.