Birkin and Kelly Baggs may soon have a new home on one of Beverly Hills’ most famous streets.
After months of mystery, it was discovered that Hermes was the buyer of two adjacent properties on Rodeo Drive. The $400 million spread is the most expensive retail real estate deal recorded in Beverly Hills in decades. The purchase of the parcel, and its sky-high price tag, was announced last summer, although the buyer was not revealed at the time. The Wall Street Journal Reported
Currently, the storefront at 388 North Rodeo Drive is home to Tom Ford, Moncler, and Balenciaga. As for whether or not Hermes will run in space, that remains to be seen. It’s currently unknown what the French maison plans to do with its new 25,000-square-foot address. The current trio of brands still have a few years left on their leases, so Hermès has some time to move out of its current retail space in the area, which is just a three-minute walk down the road.
Hermès is one of many luxury houses that, with the goal of controlling its storefronts, has gone on a bit of a property tear to add large-scale storefronts in prime locales to its portfolios. According to the WSJ, Gucci and Cartier have each dropped millions to buy stores on New York’s Fifth Avenue, London’s New Bond Street, and Paris’ Avenue Montaigne. LVMH, too, now owns many stores on Rodeo Drive, as well as other locations around the world.
While luxury has been lacking for the past few years (which Hermès has been avoiding for the most part), brands are still able to spend big on these real estate transactions thanks to a high influx of cash. So, although the $400 million sale is the largest acquisition in the area since at least the 2000s, it may only be a matter of time until other high-end brands eclipse the Hermès purchase, according to data from real estate company CBRE.
“What you’re seeing now on Rodeo Drive is not only a commitment from luxury brands who are able to buy their property, but you’re seeing buildings getting much bigger,” Jay Lochs, a Newmark vice chairman who worked on the Hermès deal, told the WSJ.
The French house will find out if bigger is better in Beverly Hills.
