Luxury retail brands continue to heavily invest in their physical store locations across key markets like New York and Los Angeles, recognizing the importance of in-store experiences to engage consumers. Over the past three years, these investments have included expanding store footprints, remodeling flagship stores—featuring stunning interiors, in-store restaurants, and high-touch services—and deepening their real estate investments to solidify their presence on the most sought-after luxury retail streets. Despite challenges like constricted supply of prime retail space, rising rents, higher interest rates, and escalating construction costs, luxury brands remain steadfast in their commitment to physical stores.
In the following sections, we highlight key trends in the luxury retail markets of New York City and Los Angeles, showcasing how brands are responding to opportunities and challenges in these iconic cities.
New York City
Luxury brands continue to prioritize key Manhattan corridors, fueling record demand. Availability on Fifth and Madison Avenues has halved in the past five years to just 13-15%, while SoHo’s Spring and Prince Streets sit at a mere 10%.
Fifth Avenue
Situated in Manhattan’s Plaza District, this corridor boasts the highest concentration of top-performing retail stores in the U.S. and remains the premier address for global luxury brands.
- In 2023, Tiffany & Co. completed a two-year renovation of its flagship at Fifth Avenue and East 57th Street, unveiling a nearly 110,000 square foot (sf), 10-story retail and experiential destination. Stopping for Tea at Tiffany’s is an experience every consumer must have.
- Louis Vuitton is undergoing a major redevelopment of its 20-story flagship at 737 Fifth Avenue.
- Rolex is transforming its existing property at 665 Fifth Avenue into a new 30-story tower, featuring a 43,000-sf flagship—its largest in the world.
- In February 2024, Chanel opened its first U.S. watch and jewelry flagship at 730 Fifth Avenue.
- Moncler recently announced plans to open its largest global store at 767 Fifth Avenue.
Madison Avenue
Home to premier jewelry and haute couture fashion houses, Madison Avenue remains a top destination for brands seeking elite, upscale locations with guaranteed prominence.
- In October 2024, Giorgio Armani debuted a new multi-use development featuring Giorgio Armani and Armani/Casa boutiques, a restaurant, and 11 floors of luxury condominiums under the Giorgio Armani Residences brand.
- In October 2024, Burberry reopened its 33,000-sf flagship at East 57th Street and Fifth Avenue following a 16-month renovation.
- French luxury goods brand Goyard is set to open its first Madison Avenue store at 699 Madison Avenue in 2025.
- Italian fashion house Dolce & Gabbana is slated to debut its 23,000-sf flagship at 695 Madison Avenue this year.
- In Spring 2025, British jewelry brand Jessica McCormack will open its first store outside the UK at 743 Madison Avenue.
SoHo
With its unique blend of high-end designers and contemporary brands, SoHo is the largest urban retail district in the U.S., drawing a diverse mix of domestic and international shoppers. Recent expansions include:
- In October 2024, Jacquemus opened its first U.S. store on Spring Street. This brand has quickly become a favorite among SoHo consumers.
- Dior opened its first standalone fragrance and beauty boutique at the corner of Prince and Greene Streets in October 2024, following in the footsteps of brands like Chanel and Dior who are engaging consumers with their beauty and fragrance stores.
- Balenciaga opened a nearly 10,000-sf store on Greene Street in September 2024, showcasing its “Raw Architecture” concept.
- Calvin Klein is set to reopen its collection store in a new SoHo location in 2025.
The scarcity of available space, combined with increasing rents, has led luxury brands to take control of their real estate investments. In 2023 and 2024, at least 14 major real estate purchases by retailers—including LVMH, Kering, Prada, and Rolex—occurred in New York City, primarily along Fifth Avenue, Madison Avenue, and SoHo. These acquisitions reflect a strategic shift toward long-term stability in a competitive leasing environment.
Los Angeles
Rodeo Drive remains the heart of Los Angeles’ luxury retail market, where demand continues to outstrip supply, pushing rental rates to new heights. With just one store currently available for lease, Rodeo Drive remains one of the most constrained luxury retail markets in the world.
- In May 2023, Chanel opened its largest U.S. flagship, spanning 30,000 sf. This four-story location devotes the top two floors to luxury client experiences.
- Rolex and Patek Philippe debuted their largest U.S. boutiques in 2024 at 312 & 314 North Rodeo Drive, totaling nearly 14,000 sf.
- In August 2024, Givenchy relocated its West Coast flagship to an iconic Frank Lloyd Wright-designed building at 332 North Rodeo Drive, occupying approximately 8,000 sf.
- Dior and Cartier are both undergoing major redevelopments, further intensifying competition for prime space.
In Los Angeles, there have been fewer opportunities to acquire assets but those that are owned by retailers—such as LVMH’s redevelopment of its 317-323 Rodeo Drive asset for Dior—afford them the possibility to invest in ambitious renovations. Real estate investors are also stepping in to expand available retail space. In July 2024, Wilshire Rodeo Plaza was acquired by private investors Justin and Tyler Mateen and Pouya Abdi, who plan to develop larger retail footprints to meet evolving luxury brand needs.
Looking Ahead
As luxury retail brands continue to invest heavily in their physical store locations across New York and Los Angeles, these iconic cities remain at the forefront of the global luxury retail landscape. Despite challenges such as rising rents, limited space, and increasing construction costs, brands are proactively adapting by securing long-term leases, pursuing strategic acquisitions, and undertaking significant renovations to ensure prime positioning on the most sought-after streets. While consumer spending on luxury is expected to slow in the coming year, these brands have lasting power, and their real estate remains some of the most valuable in commercial real estate. As demand for exclusive spaces grows, real estate ownership will remain a critical strategy for brands seeking sustained growth and success.
