Online Sales Keep Retail Market Down

(upbeat music) – [Jerry] The trend
over the last two years in retail has been away from building new brick and mortar retail. – [Tony] Retail has been falling down so, and that’s because of the dysfunction in people needing to go use
brick and mortar retail. – [Carine] But in Los Angeles in general, we’re not seeing what other
people are seeing right now. L.A. is a healthy market. – [Pete] And so within the
right streets and locations in Beverly Hills, you
can find astronomical prices and terms happening. It’s really an issue of
being in the right place and Rodeo Drive in Beverly Hills has been in the right place for a long time. – [Carine] Rodeo Drive has
a two percent vacancy rate, North Beverly Drive has a
five percent vacancy rate. I would say a lot of the big luxury guys are
expanding right now. – [Pete] In retail in
California, we see a continued reassessment by owners of retail projects as to whether or not they
should repurpose the site for a new higher and better use. – For example, in Los
Angeles, on the west side, the West Side Pavilion is
now going to be converted from a retail mall into office space. – [Pete] Retail, at least in
those kind of configurations in a lot of locations, is no longer the highest and best use for the demands for space. – [Tony] The good parts of retail are the retail that is
positioned to draw people that have a purpose
for being at the retail that isn’t just to do
something to do online. Anything you can do online, then your retail is competing with people who basically would rather just order stuff at home and get it. So you have to have sort
of a very trendy lifestyle or cater to customers who
don’t like to be online, high-end luxury customers, for instance. So that retails fine, and the rest of the retail
has to repurpose itself. (upbeat music)

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