Beverly Hills real estate is going to cost you, and Chanel is ponying up serious cash for some of its own.
The French luxury retailer is paying a record price — $152 million, which amounts to more than $13,000 per square foot — for an 11,500-square-foot building at 400 North Rodeo Drive in Beverly Hills, reports The Wall Street Journal.
Sharing data from real estate firm Real Capital Analytics, the outlet adds that the previous record for a Southern California real estate purchase was for a building on the same street (North Rodeo), at a cost of about $10,400 per square foot, in 2012.
Jim Costello, senior vice president at Real Capital Analytics, expressed agreement with WSJ‘s observation that the Chanel deal is indicative of the growing demand for retail real estate in large cities that are populated by significant numbers of affluent shoppers.
“That’s what [retailers] have been willing to pay up for,” Costello remarked. “That’s where the millennials are. That’s where the consumers are.”
WSJ compares Rodeo Drive to New York’s Madison Avenue in that both are destinations where luxury brands can thrive. Scott Kalt, a founding partner at Elkins Kalt Weintraub Reuben Gartside LLP, a law firm that represented one of two families in the partnership that sold the property to Chanel, described the value of such a real estate purchase as “like buying a very expensive billboard.”
As the WSJ story points out, there is a variety of luxury retailers with a presence on North Rodeo, including Cartier, Gucci and Prada. People familiar with the matter told the outlet that, prior to buying the property (which is on the corner of Brighton Way), Chanel had rented it for years.
“If it’s not the single best corner in Beverly Hills, anyone would list it in the top two or three,” Ron Goldie, a Los Angeles-area attorney who also worked with one of the families selling the property, told WSJ. “It’s highly visible.”