While New York and Los Angeles always dominate the U.S. retail conversation, brands are on the move beyond Fifth Avenue and Rodeo Drive.
Here are the newest markets our real estate experts predict are going to see continued growth and exciting developments in 2015.
Hot spots: South Congress Avenue, downtown Austin
Average rent in 2014: $19.37 per square foot
While many retailers are still targeting Dallas and Houston, Austin has become a buzzing market. The city’s booming population and stable economy make it attractive. Austin is redeveloping its downtown Seaholm district as a mixed-use neighborhood, and brands are moving into the smaller, vintage neighborhoods along South Congress Avenue.
“Austin is going to become a top-tier market in 2015,” said Anjee Solanki, national director of retail services for Colliers International, who noted that the city is attracting millenials “with personalized and customized retail.”
Toms opened in the city last year, introducing its first in-store coffee bar. “Austin is where a lot of culture is happening — and it was important to us to be in a place where culture is happening,” said Toms founder Blake Mycoskie.
Hot spots: Bal Harbour, Lincoln Road, Miami Design District
Average rent in 2014: $38.10 per square foot *
Thanks to the city’s strengthening economy and a growing reputation as an international destination, more luxury brands are setting up shop there.
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“Everything is hot in Miami, but especially accessories,” said Faith Hope Consolo, chairman of Douglas Elliman Real Estate’s retail division. “Jewelry, shoes and bags are huge for the market and a strong opportunity.”
The Webster, which is best known for its flagship in Miami Beach, recently debuted both a men’s and women’s shop at Bal Harbour. Other notable openings include Chloe at Bal Harbour and Ted Baker on Lincoln Road. Louis Vuitton and John Lobb are set to open in the hot Design District this year, while Christian Louboutin is in the process of expanding its boutique there.
Hot spots: CityCenterD.C., East End and Penn Quarter in downtown D.C., Tysons Galleria
Average rent in 2014: $29.39 per square foot
Following the growth of the district’s restaurant and dining scene over the past several years, residents are demanding more retail options, too. The much-buzzed-about opening of mixed-use development CityCenterD.C. promises significant retail traction. “D.C. is open to more opportunities for fashion and accessories,” said Elliman’s Consolo. “The opening of the mixed retail space downtown and the growth of the condo and residential markets is part of the boom the city is experiencing.”
CityCenterD.C., just north of the capital, is a hot ticket this year, with retailers from Hermès to Vince opening doors. Not far away, in Virginia’s D.C. suburbs, Tysons Galleria continues to draw key tenants, including Ugg Australia, which debuted a high-tech concept shop last December. “The D.C. consumer is very tech-savvy, and this location is a great opportunity for us to test some of our digital capabilities,” said Gerard Marceda, VP of retail for North America.
Hot spots: Buckhead Atlanta, Avalon
Average rent in 2014: $12.47 per square foot
The upscale Oliver McMillan mixed-use development, Buckhead Atlanta, opened last September and has led the way for growing brand representation in the city. It has attracted big-name luxury retailers such as Louboutin, Hermès and Tom Ford as well as trendy eateries like Shake Shack. “We’ve been thinking about this for many years, and we finally decided to [do it] due to the quality and dynamic [nature] of the project,” said Alexis Mourot, group COO and GM for Louboutin.
Avalon, a lifestyle center developed by North American Properties, which opened last October, has followed the successful models of other centers, relying on a mix of mid-market retail like J.Crew and Lululemon combined with Whole Foods and other destination stores.
Simon Property Group is also overhauling its two malls, Lenox Square and Phipps Plaza. “Atlanta is an interesting city … lots of people meet there to conduct business because it’s a central location, it has a good tourism market and overall just does well,” said Laura Pomerantz, principal and CEO at Laura Pomerantz Real Estate.
* Retail rents courtesy of CoStar Group Inc.