Article

City retail

On the road to recovery

February 01, 2022
Contributors:
  • Taylor Coyne
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As of mid-January, office re-entry was just shy of 28% according to Kastle Systems, an office building security provider that tracks badge swipes for its top 10 cities.  This average was closer to 50% in mid-December, before Omicron became as widespread. As many companies continue to push the return of workers to the office further into 2022, urban foot traffic will continue to trend below pre-pandemic levels.

 


Tourism has also not fully bounced back. Thankfully, all but one of the JLL tracked urban markets (San Francisco) has seen rebounds in domestic travel according to Placer.ai. But international tourism has yet to recover. The U.S. saw a 76% drop in international visitation in 2020. Retailers in gateway markets rely on global visitors: in 2019, international travelers spent more than $43.4 billion on retail goods, according to the International Trade Administration. The lifting of international travel restrictions in late 2021 will aid the corridors that rely heavily on outside visitors, but a full recovery will take some time. 

 

Domestic tourism recovery as of January 2022
 


Corridors with a concentration of luxury are performing very well

After taking a dip in 2020 when uncertainty was high and consumers looked towards discount and off-price, luxury sales have bounced back and according to Statista, are expected to surpass 2019 levels this year. And corridors with a high concentration of luxe retailers are benefitting (Rodeo Drive, the Gold Coast in Chicago, Design District in Miami and Bloor Street in Toronto).

U.S. luxury sales expected to surpass 2019 levels in 2022
 

 

The success of luxury is best displayed in Miami where the Design District has seen foot traffic levels above pre-pandemic levels since December 2020. This is the only JLL-tracked corridor to see such rebounds. 

Miami's Design District boosts the city's urban recovery with foot traffic levels above 2019 levels

 



On average, foot traffic has been 42% higher than 2019 levels, according to our analysis of Placer.ai data. Miami, and Florida more broadly, eased its COVID restrictions earlier than other metros which attracted people looking to escape lockdowns. Very few move-outs occurred in 2020 so while there has been less leasing activity in the Design District, retailers and restaurants have been performing well with increased traffic.

On the opposite coast, Rodeo Drive has little to no available space. 

  • Ferrari opened its first store along Rodeo Drive this past year
  • Gucci expanded its current footprint
  • Chanel is spending millions on its double-lot renovation

North of the border in Canada, Bloor Street rents are almost back to pre-COVID levels.

  • New market entrants include The Webster, Isaia, Anne Fontaine, and Lafayette 148
  • Cartier is undergoing a renovation
  • Aesop is expanding its existing store
  • Balenciaga opened a popup that was open through January
     

 

 

City Retail 2022

Contact Taylor Coyne

Sr. Manager, U.S. Retail Research