1、ResearchLuxury,digital natives and athleisure drive prime urban demandCity Retail 2023North America|20222|City Retail|2023 2022 Jones Lang LaSalle IP,Inc.All rights reserved.What is a prime urban corridor?A prime urban corridor is a nationally recognized shopping district distinguished by its mix of

2、 high-street,national and international tenants.Typically named for the most notable retail street within the corridor,these shopping districts have boundaries that were carefully drawn to include the most prominent retail spaces,as well as occurring and potential retail sprawl within these areas of

3、 focus.Prime urban corridors emerge organically and are not the product of a single master developer.Weve identified and defined such North American corridors for this report,further segmenting them into“existing”and“emerging”corridors.Existing prime urban corridors are characterized by a concentrat

4、ion of national credit tenants.Emerging prime urban corridors include tenants of varying credit profiles.They have more local retailersand restaurants and feature a growing presence of national brands.Prime urban corridorsVancouverRobson StreetWest 4th StreetSan FranciscoUnion SquareFillmoreHayes Va

5、lleyThe MarinaLos AngelesBeverly Hills TriangleMelroseThird Street PromenadeAbbot KinneyMiamiLincoln RoadDesign DistrictNYCFifth AvenueMadison AvenueTimes SquareSoHoUnion SquareMeatpacking DistrictWashington,DCM Street14th StreetPhiladelphiaWalnut StreetMarket EastChicagoMichigan AvenueGold CoastFul

6、ton MarketWicker ParkTorontoBloor StreetQueen Street WestMontrealSainte-Catherine StreetBostonNewbury StreetSeaport District3|City Retail|2023 2022 Jones Lang LaSalle IP,Inc.All rights reserved.The urban recovery continuesMore than two years out from the onset of the pandemic in 2020,North Americas

7、prime retail corridors have recovered at varying paces.Prime corridors that draw from existing residential populations have recovered faster than those located near central business districts,which are still awaiting the full return of office workers and international tourists.However,retail real es

8、tate fundamentals throughout the country are solidsteady absorption,low vacancy,increasing rentscontributing to positive outcomes in urban leasing:Residential migration to the south has encouraged rent growth and retailer interest in the Sun Belt,especially Miami.Luxury retailers are especially acti

9、ve,propelled by a confident,affluent consumer base.Digitally native tenants are expanding their horizons and finding luck in new cities.Athleisure retailers have shown newfound interest in Canada,as foot traffic recovers post-lockdown.-120.0%-100.0%-80.0%-60.0%-40.0%-20.0%0.0%20.0%40.0%Jan-20Mar-20M

10、ay-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22May-22Jul-22Sep-22BostonChicagoLAMiamiNYCPhillySFDCFoot traffic has been slowest to recover in the densest urban areas|%change in foot traffic from 2019Source:Placer.ai4|City Retail|2023 2022 Jones Lang LaSalle IP,Inc.All rights

11、reserved.Retail rule number one:Go where the people areMany office workers have returned,but security card swipe data from Kastle Systems shows that physical office occupancy is still only around 48%of 2019 levels,as of November 2022.The stagnation of this figure reflects the impact of the hybrid wo

12、rk model on urban daytime populations.Additionally,despite the easing of restrictions for international tourists in December 2021,international visitation is still down more than 66%from pre-pandemic levels,according to the International Trade Administration.Retailers in tourist-heavy prime corridor

13、s,such as Times Square in New York City,Robson Street inVancouver and Union Square in San Francisco,are contending with the absence of international tourists,as these visitors spent a collective$154 billion in 2019.However,domestic travelers have mostly returned.As of September 2022,almost all the p

14、rime urban cities have seen domestic tourism recover to 2019 levels.While this has offered a needed boost to tourist-dependent retailers,foot traffic in these corridors will likely remain partially depressed until international tourists fully return.20192021New York City13.5 million5.3 millionMiami8

15、.3 million3.4 millionLos Angeles7.6 million3.3 millionOrlando6.1 million2.6 millionSan Francisco3.2 million800,000Top 5 markets for international arrivals Nearly all prime urban cities have seen domestic tourism recoverSeptember 2022 compared to September 2019Source:Placer.ai129%120%117%112%108%101%

16、91%89%MiamiBostonLos Angeles New York City PhiladelphiaChicagoWashingtonDCSanFranciscoSource:International Trade Administration5|City Retail|2023 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Miami migration encourages retail boomEncouraged by the promise of more space,a lower cost of living an

17、d abundant sunshine,many Americans have decided to eschew claustrophobic coastal cities and settle down in the Sun Belt,the region of the southern United States stretching from Florida to Southern California.No part of the Sun Belt has benefited more from this pandemic-fueled attention than South Fl

18、orida.Already a prime tourist destination,the area has seen a major influx of permanent residents.As a result,Miami has seen greater multifamily rent growth than any of the other prime urban cities.Many major companies have elected to expand their presence in South Florida,which will further attract

19、 dollars to the region.Goldman Sachs and Blackstone have both increased their office footprints in the region,while financial services firm Citadel is developing a skyscraper to house its new global headquarters as it relocates from Chicago to Miami.Unsurprisingly,Miami has also seen some of the gre

20、atest retail rent growth in the country,with rents showing an annual appreciation of 9.5%in Q3 of 2022.Retail demand in Canada has also been driven by residential growth.Since 2015,Toronto has led the“crane count”in North America,and the various residential and mixed-use developments promise to brin

21、g thousands of new residents to the urban market.With hotel occupancy peaking at 84%this summer,retailers ranging from Balenciaga to Lafayette 148 have been attracted by the sustained foot traffic on Bloor Street,now that the countrys extensive lockdowns have been lifted.Increased demand results in

22、multifamily rent growth in MiamiSources:JLL Research,Axiometrics17.3%10.7%10.2%9.6%9.2%9.1%8.2%7.0%0.0%5.0%10.0%15.0%20.0%25.0%MiamiLos AngelesNew York PhiladelphiaChicagoBostonWashington,DCSanFranciscoQ1 2022 YoY rent changeQ2 2022 YoY rent changeQ3 2022 YoY rent change6|City Retail|2023 2022 Jones

23、 Lang LaSalle IP,Inc.All rights reserved.Retailers take flightto quality,that is Domestic travelers are not the only entity taking flightso too are retail tenants,in search of the newest and most updated product.The abundance of new residential development in Miamia majority of which is mixed-usehas

24、 been instrumental in drawing new retailers to the region.While Lincoln Road has historically been the premier retail destination in the city,the temporary closing of the convention center and the rising profile of other neighborhoods resulted in decreased foot traffic along the corridor.As such,new

25、 entrants to the market have set their sights elsewhere,opting instead for the contemporary feel of the Design District,causing vacancy on Lincoln Road to trend up.A similar story has been seen in New Yorks Meatpacking District,where Audemars Piguet signed on for 5,100 square feet at the recently re

26、novated 5258 Gansevoort Street,choosing new product over the buzzy atmosphere and co-tenancy of SoHo.The same is true in Boston:the charming atmosphere of Newbury Street was not enough to lure apparel retailers Scotch&Soda and Rag&Bone,which both opened locations in the newly redeveloped Seaport Dis

27、trict this year.And in Philadelphia,the announcement of the new Sixers arena in Market East has begun to drum up activity in the corridor.Although it wont open until 2031,landlords and tenants are already beginning to imagine a basketball arena as the new centerpiece and anchor of the corridor.7|Cit

28、y Retail|2023 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Luxury leads the way in leasingOne retail category that has seen almost uniformly positive results in recent months is the luxury sector.Luxury was one of the first retail categories to bounce back after lockdown restrictions were lift

29、ed,with U.S.luxury sales rising by 8.5%in 2021 to reach over$64.1 billion and forecast to eclipse pre-pandemic levels by the end of 2022.This growth has been driven by the stability of affluent luxury consumers,who experienced relatively little turbulence during the pandemic,leaving them well-capita

30、lized and eager to patronize their favorite retailers.These retailers quickly reinvested gains into the bread and butter of their business model:opening new stores.Luxury retail locations are known for curating an elevated and unique customer experience,augmenting the intangible quality of“luxury”th

31、at consumers look to these brands for.And driven by increased demand,these brands are doubling down on their favorite prime retail corridors across the country.Many retailers have announced multiple store openings at once.Such is the case with legacy house Chanel,which has opened more than 15 new st

32、ores in the U.S.since the onset of the pandemic,in places like Miamis Design District and San Franciscos Union Square.Others,like Mike Amiri and his eponymous label,are taking a slower,more deliberate pace in their store rollout.After opening its first location in hometown Los Angeles in 2020,the br

33、and then expanded to SoHo,New York,in 2021 before opening a 1,972-square-foot outpost in the Design District of Miami earlier in 2022.One trend that has emerged from the multitude of luxury move-ins this year is the necessity of a bi-coastal presence.Gucci,Louis Vuitton and Loewe each opened new loc

34、ations in New York City and Los Angeles.Each chose a different neighborhood in Los Angeles,while Loewe and Louis Vuitton agreed on SoHoin Manhattan.In keeping with the spirit of its brand,Gucci bucked convention and went to Meatpacking instead.The return of“occasion dressing”has influenced an uptick

35、 in activity from all apparel tenants across the prime corridors,even outside of the luxury sector.Nike made a big splash in Montreal with a new 25,000-square-foot flagship on Saint-Catherine Street.Aritzia has signed leases on Chicagos Michigan Avenue and Philadelphias Walnut Street,as well as two

36、new leases in New York on Fifth Avenue and in Union Square.Vancouver residents are getting a major footwear upgrade,as Allbirds is making its first entry into the market on West 4th Street.Additionally,Wolford opened two stores this year on Madison Avenue and M Street,and Supreme reaffirmed its pres

37、ence in Chicago and Los Angeles,with new stores in Wicker Park and on Melrose.Luxury accessories retailers have been expanding as well,with Rolex opening stores in DC and Chicago,while Patek Philippe opted for Miami and Newbury Street in Boston instead.Breitling is another active player in the space

38、,opening in Miami,New York and Chicagos Gold Coast this year.And ITSUGAR made plenty of noise this year on the experiential side,opening stores in Chicago and San Francisco to accompany its new flagship in Times Square.U.S.luxury goods revenue(billions)Source:Statista$61.23$61.94$62.37$62.35$64.34$6

39、8.95$59.12$64.12$69.52$75.69$77.28$78.75$80.18$81.64201420152016201720182019202020212022202320242025202620278|City Retail|2023 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Notable luxury move-ins 2022TenantLocationCorridorPatek PhilippeBostonNewbury StreetCartierChicagoGold CoastGoyardChicagoG

40、old CoastChanelLas VegasShops at CrystalsGucciLos AngelesMelroseDiorLos AngelesRodeo DriveLouis VuittonLos AngelesRodeo DrivePiagetLos AngelesRodeo DriveMonclerLos AngelesRodeo DriveChanelMiamiDesign DistrictGucciNew York CityMeatpacking DistrictVersaceNew York CityPlaza DistrictHermsNew York CityPl

41、aza DistrictGivenchyNew York CitySoHoLoeweNew York CitySoHoHermsNew York CityWilliamsburgBottega VenetaSan FranciscoUnion SquareYves Saint LaurentSan FranciscoUnion SquareBalenciagaTorontoBloor StreetSalvatore Ferragamo TorontoBloor StreetCartierTorontoBloor StreetCartierVancouverRobson Street9|City

42、 Retail|2023 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Clicks-to-bricks tenants expand horizons Historically,digital native brands showed an overwhelming regard for SoHo in New York City,where many chose to open their first physical locations.During the pandemic,SoHosaw daytime foot traffic

43、 sustained by nearby residential populations.This made the corridor an ideal destination for luxury retailers in aggressive expansion mode,who have leased up ample space in the corridor in the past 18 months.High demand from these luxury retailers placed upward pressure on SoHoasking rents,which inc

44、reased in Q3 2022 by nearly 5%year-over-year.Unable to compete with the extremely well-capitalized luxury retailers in SoHo,many digitally native tenants redirected expansion plans to cities like Philadelphia,Washington,DC,and San Francisco.Walnut Street,M Street and Hayes Valley offer comparable fo

45、ot traffic to SoHoand have average asking rents around 40%less,making them especially appealing to these retailers.The growing base of direct-to-consumer brands in these cities has also been augmented by the presence of Leap,a service that helps online retailers open and operate physical stores.Leap

46、s turnkey model has allowed digital brands like NAADAM,ThirdLove,A Pea in the Pod and more to open in SoHoand on Michigan Avenue,Melroseand M Street.Many other digital native tenants have also entered the Georgetown market,the most notable of which is Glossier.The makeup giant has been ramping up it

47、s physical presence in recent months,opening in 4,000 square feet on M Street in addition to new outposts in Miami and Philadelphia.Digital native accessories brand Gorjana opened stores in both Philadelphia and DC this year,while home furnishings retailer Brooklinen went to Hayes Valley in San Fran

48、cisco for the sister store to its new Philadelphia location.Jewelry company Mejuri also put down roots in the Marina in San Francisco,in addition to opening in Fulton Market in Chicago and Abbot Kinney in Los Angeles.Within the direct-to-consumer category,apparel and athleisure brands continue to ex

49、pand aggressively.Faherty opened new stores this year in Philadelphia and San Francisco,while cashmere company NAADAM opted for locations in San Francisco and DC.Vuori,an athleisure retailer whose comfortable joggers gained popularity at the height of the work-from-home era,plans to open 70 new stor

50、es in the next five years,starting with its first East Coast locations in SoHo and on Newbury Street.Lululemon opened two prime urban locations in Canada this yearon Sainte-Catherine Street and Bloor Streetin addition to an outpost in the Fillmore in San Francisco.Alo Yoga also found a home on Bloor

51、 Street,while simultaneously opening in the Seaport in Boston and leasing the former Banana Republic space at the corner of Wisconsin Avenue and M Street.10|City Retail|2023 2022 Jones Lang LaSalle IP,Inc.All rights reserved.Notable clicks-to-bricks move-ins 2022TenantLocationCategoryCorridorMejuriC

52、hicagoAccessoriesFulton MarketVuoriNew York CityApparelSoHoGlossierPhiladelphiaCosmeticsWalnut StreetOutdoor VoicesPhiladelphiaApparelWalnut StreetBrooklinenPhiladelphiaHome furnishingsWalnut StreetGorjanaPhiladelphiaAccessoriesWalnut StreetNAADAMSan FranciscoApparelFillmoreThirdLoveSan FranciscoApp

53、arelFillmoreBrooklinenSan FranciscoHome furnishingsHayes ValleyFahertySan FranciscoApparelMarinaJoybirdSan FranciscoHome furnishingsMarinaMejuriSan FranciscoAccessoriesMarinaGorjanaWashington,DCAccessoriesM StreetGlossierWashington,DCCosmeticsM StreetAlo YogaWashington,DCApparelM StreetNAADAMWashing

54、ton,DCApparelM Street11|City Retail|2023 2022 Jones Lang LaSalle IP,Inc.All rights reserved.“Prime”redefined:New corridors emergeThe pandemic is often credited with accelerating trends that were already in motion,and the same acceleration can be seen in the emergence of new prime retail corridors.Th

55、ese corridors have always been buzzy,but new residential developments and substantial shifts in work preferences have expedited their rise to prominence.When Herms opened a new store in Williamsburg this year,right on the heels of its new flagship on Madison Avenue,it all but cemented the neighborho

56、od as a premier retail destination in New York City.Drawing from the vast residential population of Brooklyn,Williamsburg is home to a slew of credit tenants and has seen new leases from Glossier,H&M and Showfields this year alone.An aging millennial and Gen Z population have migrated en masse to St

57、udio City in Los Angeles,prompting retailers like Lululemon,Buck Mason and WarbyParker to set up shop on Ventura Boulevard,where excellent co-tenancy is now a major draw.King Street in Charleston is known for its bustling food scene,and as the main thoroughfare of the city,its steady foot traffic le

58、vels have attracted the likes of Madewell and Target.About JLLJLL(NYSE:JLL)is a leading professional services firm that specializes in real estate and investment management.JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities

59、,amazing spaces and sustainable real estate solutions for our clients,our people and our communities.JLL is a Fortune 500 company with annual revenue of$19.4 billion,operations in over 80 countries and a global workforce of more than 102,000 as of September 30,2022.JLL is the brand name,and a regist

60、ered trademark,of Jones Lang LaSalle Incorporated.For further information,visit .About JLL ResearchJLLs research team delivers intelligence,analysis and insight through market-leading reports and services that illuminate todays commercial real estate dynamics and identify tomorrows challenges and op

61、portunities.Our more than 400 global research professionals track and analyze economic and property trends and forecast future conditions in over 60 countries,producing unrivalled local and global perspectives.Our research and expertise,fueled by real-time information and innovative thinking around

62、the world,creates a competitive advantage for our clients and drives successful strategies and optimal real estate decisions.2022 Jones Lang LaSalle IP,Inc.All rights reserved.The information contained in this document is proprietary to Jones Lang LaSalle and shall be used solely for the purposes of

63、 evaluating this proposal.All such documentation and information remains the property of Jones Lang LaSalle and shall be kept confidential.Reproduction of any part of this document is authorized only to the extent necessary for its evaluation.It is not to be shown to any third party without the prio

64、r written authorization of Jones Lang LaSalle.All information contained herein is from sources deemed reliable;however,norepresentation or warranty is made as to the accuracy thereof.For more information,contact:C.Ebere AnokuteManager of Research,RetailJLLSpecial thanks to the following researchers:Saul Lua,Nicolas Lau,Heli Brecailo,William Schneider,Guowei Shan,Clint Randall,Erin Proto James CookAmericas Director of Research,RetailJLLJamesD.CKeisha VirtueSenior Analyst of Research,RetailJLLKeisha.V