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Wednesday, Jul 6, 2022

Broadway’s Next Stage

Mainstream clothing brands and niche fashion lines are descending on Broadway, gradually turning the southern end of the corridor near Apple Inc.’s potential store into a hub for retailers who want a piece of downtown’s edgy allure.

Guess Inc., Nike Inc., and Adidas America Inc. are said to be in talks to pick up leases on Broadway, while J Crew Group Inc. and an H&M brand are scouting for space. Danish, German, and South Korean retailers are moving in, too, while French and Japanese companies are hunting for storefronts. The Broadway Trade Center, occupying nearly a full block across from Apple’s planned Tower Theatre site, plans to fill roughly 200,000 square feet with contemporary fashion designers. The newcomers would sit alongside fashionable boutiques such as Bnker and Acne Studios as well as outposts of clothiers Gap Inc. and Ross Stores Inc.

“You’re seeing people start to get it, and you’re going to start to see a lot of Broadway infill really quickly,” said Justin Weiss, a vice president at Kennedy Wilson Brokerage Group in Beverly Hills.

But still uncertain is whether enough retailers can pack Broadway with the density needed to transform the street into a high-end shopping zone that would attract Angelenos from farther afield.

“If you can get enough retailers in the same area, you can generate the foot traffic,” said retail consultant James Dion of Dionco Inc. in Chicago. “Either the spark is ignited and it’s amazing or it’s going to be a miserable failure.”

With rents low on Broadway compared with high-fashion streets in Venice or Beverly Hills, companies that jump in now could reap rewards if they can stomach the uncertainty, said Robert Cohen, Santa Monica-based vice chairman of New York real estate brokerage RKF.

“It takes a lot of vision, and a lot of guts, to launch in an area that is literally going through this dramatic transition,” he said. “It’s a great gamble.”

Bold beginnings

After Broadway’s heyday in the 1920s and ’30s, its opulent theaters, stores, and offices gradually emptied, leaving run-down shells. But an influx of high-end apartments in the last decade has prompted big changes, attracting gourmet restaurants and a lively arts scene. Some theaters reopened for film screenings, and City Councilman Jose Huizar is advocating for a Broadway streetcar as part of his Bringing Back Broadway project, launched in 2008. Various policy overhauls since then have spurred revitalization, said Jessica Wethington McLean, the initiative’s executive director.

“Broadway has managed to attract interesting, unique retail, both large and small, that you don’t necessarily find in any other part of the city, or any other city in the country,” she said.

Urban Outfitters Inc. planted a flag in the former Rialto Theatre on Broadway between Eighth and Ninth streets in 2013, followed by Gap’s factory store, Burlington Coat Factory, Acne, and Bnker. Niche clothier Oak moved in, too, but is now closing in the wake of the bankruptcy of its parent company, American Apparel Inc. The Ace Hotel, along with its popular bar and theater, opened on Broadway just past Ninth in 2014 and helped bolster the area’s hipster cred.

Apple began scouting for space in the area months ago and is in the process of securing retail space in the historic Tower Theatre at 800 S. Broadway, according to sources familiar with the transaction. Terms of the deal under discussion could not be determined, but the property offers about 7,500 square feet of theater space and another 7,500 square feet of basement space.

An Apple spokeswoman said the company has not made any announcements about a store at that location. Cohen said RKF, which is representing Apple, declined to comment.

Word of Apple coming to town appears to be contributing to Broadway’s boom, given the store’s potential to act as an anchor tenant for the entire neighborhood, pushing foot traffic to retailers up and down the block. Adidas is considering the space next door, between the theater and Urban Outfitters, according to a source familiar with the deal.

Guess is said to be looking at space on the 700 block of Broadway, while Nike is contemplating space farther north. And Cos, a brand from clothing giant H&M, has already nabbed space at the former Olympic Theatre on Eighth off Broadway. Its sister company, & Other Stories, is also in the market for space.

Global appeal

Amid Broadway’s growth, international fashion brands appear to have taken interest in the neighborhood faster than their American counterparts. Existing retailers represent Australia (Aesop and Bnker), France (A.P.C.), and Sweden (Acne). Mykita, a German eyewear store, is opening soon at the Eastern Columbia building, and is set to be joined next door by Han Kjobenhavn, a Danish clothier specializing in men’s apparel. Across the street, a fashion designer from Seoul, South Korea, is in the process of signing a lease next door to Urban Outfitters, said a source familiar with the deal. Zadig + Voltaire, of France, is said to be looking for space as well.

“You typically get a lot of European and international brands because that’s the way they look at their urban core markets – being a pioneer and taking that risk to get reward,” said RKF’s Cohen, noting that rents in and around Broadway range from about $3.50 to $8 a square foot.

“It’s hard to find high-impact locations in Los Angeles at a lower price point,” said Gabe Kadosh, vice president for retail services at Colliers International.

That’s not to say Broadway is a slam dunk, however.

“For some of the international tenants that I have toured, their first reaction is, Where are all the people?” said Elle De Frih, an associate broker at Newmark Grubb Knight Frank. “Some held off and decided to open on the Westside for now, but are keeping an eye on downtown to see how it develops.”

Friendly neighbors

Several massive renovation and construction projects are in the works that will offer thousands of square feet of fresh retail space in historic properties. The Merritt Building at Broadway and Eighth is under contract, according to a source familiar with the deal, with the buyer planning a major renovation. The broker marketing the site, Michael Condon Jr. of Cushman & Wakefield, would not comment on the possibility of a sale except to say the marketing process is moving forward.

At Broadway and Eleventh Street, the Herald Examiner building is undergoing a renovation that would incorporate ground-floor retail. And the Broadway Trade Center, across from the Tower Theatre, is embarking on an ambitious plan to offer 200,000 square feet of retail along with office and hotel space. Phillip Sample, a CBRE senior vice president with the listing for the site, said he is negotiating with prospective retail and office tenants and expects the space to be ready within a year and a half.

Andrew Turf, a CBRE senior vice president handling the project’s retail component, said he aims to attract a mix of companies similar to those already settled around Broadway and Ninth.

“We’re after contemporary, urban, edgy fashion brands,” he said. “We’re trying to make this a global destination.”

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