The quaint commercial hub at the western end of L.A.’s tony Brentwood area has long been a neighborhood draw.
With annual rents starting as much as $90 a foot less than those in comparable upscale neighborhoods, the commercial center lining San Vicente Boulevard east of 26th Street has been home to mostly independent shops, including dry cleaners and beauty salons.
But that may soon change. Several upscale, national retailers have opened there lately, and now a 9,500-square-foot retail center is about to break ground. Together, the news shops are expected to draw more shoppers from a wider area as they help usher in higher rents.
The new center will be home to Theory and Helmut Lang, both based in New York and owned by fashion company Fast Retailing Co. of Yamaguchi, Japan. They have each signed 10-year leases for stores at 13038 San Vicente Blvd. The high-end fashion retailers will move next spring into spaces specially constructed to suit their needs.
Century City real estate company Blatteis & Schnur Inc., which owns the property, put up construction barriers last week to begin demolishing the 76-year-old building that for decades housed family-run liquor store Briggs Wine & Spirits. The company plans to build a two-tenant retail complex in its place with two levels of roof parking.
Andrew Rosen, chief executive of both Theory and Helmut Lang, said he saw a lot of opportunity in the area for his brands.
“I love the whole neighborhood shopping experience in Brentwood,” he said. “I think people from the Westside will come because there’s a lot of energy going on now. A lot of stores have opened to create an exciting retail environment.”
The two shops won’t be the only out-of-towners moving into the neighborhood.
Rag & Bone Inc., another New York fashion retailer, signed a lease earlier this summer for a space down the street from Theory and Helmut Lang on San Vicente Boulevard with plans to open in October.
And other big fashion brands have recently opened in the area. Last year, New York retailer Intermix Inc. – since acquired by San Francisco’s Gap Inc. – opened shop at the Brentwood Country Mart, adjacent to the Blatteis & Schnur site, which until then had largely been the domain of local fashion retailers, including James Perse and shoe designer Jenni Kayne. Around the same time, New York retailer Scoop moved in across the street from the Country Mart.
Ashley Brown, senior vice president at Blatteis & Schnur, said many of the retailers drawn to the area were attracted not only by its charm, but by the strong demographics. According to a report from Neilson Co. based on U.S. Census data, average household incomes within a one-mile radius of San Vicente at 26th were about $189,000 in 2012, compared to $119,000 and $94,000 for competing retail districts at North Beverly Drive and Robertson Boulevard, respectively. Census data from 2011, the most recent period available, show that more than 28 percent of households in the wider 90049 Zip code that includes Brentwood had annual incomes of more than $200,000 – and more than 55 percent had household incomes greater than $100,000.
Bryan Gordon, treasurer of the Brentwood Community Council and owner of the property where Rag & Bone will open later this fall, said people in the community have expressed some concern that the new stores might push out long-time vendors and bring increased traffic, but ultimately he think the stores will have a positive impact on the area.
“(The stores) will help other retailers, help the restaurants and provide more shopping options in Brentwood for the community,” he said. “They’ll provide employment, generate sales tax and generally lift the whole area.”
Blatteis & Schnur, a family-run retail brokerage and investment firm founded in 1922, bought the property at 13038 San Vicente Blvd. in 2008 for about $6 million.
The firm, which has always focused on upscale urban retail projects, has been on a buying spree this year, acquiring six buildings on Abbot Kinney Boulevard, one on Robertson Boulevard and another on Hollywood Boulevard.
It made a splash in 1989, when Dan Blatteis, co-chairman of the firm, brokered the sale of a 120,000-square-foot Wilshire Boulevard property in Beverly Hills that became home to Barney’s New York. In 2010, his firm bought the property on Third Street Promenade in Santa Monica where bookstore Borders, now bankrupt, used to be. After tearing down the building and constructing a modern glass-fronted store, Blatteis & Schnur leased the space to Apple Inc. and sold the property last year for $60 million.
Blatteis said the firm, which in addition to the former liquor store on San Vicente also owns the Brentwood Town Center, had always planned on rebuilding the Brentwood retail property to bring in high-end tenants.
“We bought the property a few years ago with the intent to develop it, but the recession slowed us down,” he said.
While waiting for the market to recover, Blatteis & Schnur worked to entitle the property and leased the space to short-term tenants Bubble Blow Dry and Makeup & Go.
The company expects to spend about six months and $12 million developing the retail project, delivering it to Theory and Helmut Lang for interior build-out by March. Theory and Helmut Lang expect to open the two stores shortly thereafter.
Both brands already have an L.A. presence on Melrose Avenue near Melrose Place, and Theory opened a second L.A. store on North Beverly Drive in Beverly Hills last spring.
Matthew Fainchtein, senior director of retail services in Century City for Cushman & Wakefield of California Inc., helped Theory and Helmut Lang shop around West L.A. for retail space. He said the retailers looked at space in Venice, Santa Monica and even Malibu before finally settling in Brentwood, where rents are still low compared to other popular shopping destinations.
As recently as this summer, Fainchtein said, the under-the-radar corner in Brentwood might have demanded annual rents in the $70 to $144 a square foot range. Though neither Blatteis & Schnur nor its new tenants would disclose terms of the lease deal, Fainchtein said rental rates fell within that range.
By comparison, annual asking rents for retail space on Abbot Kinney Boulevard in Venice started closer to $100 a square foot and space in Malibu started at about $120. On North Beverly Drive and Robertson Boulevard, landlords demand rents of $140 and $160 a foot to start, respectively.
If the stores are successful, Gordon of the local community council said he expects rents in Brentwood to rise, but he doesn’t think that’d be a bad thing.
“We are just now recovering from the most brutal recession in living memory, and rents are just beginning to recover to their pre-recession numbers,” he said. “There is always a concern that some tenants will be hurt by rising rents, but the market will always find its level, and I don’t believe it’s our place to distort it. It’s always sad when a beloved long-term tenant has to close its doors, but it doesn’t happen very often in Brentwood.”
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