As we move into 2025, the retail landscape in North America’s urban hubs continues to evolve, shaped by emerging trends, infrastructure upgrades, and shifting consumer preferences. JLL’s City Retail 2025 report highlights key developments, challenges, and opportunities across the continent’s most vibrant retail corridors. From luxury brands expanding their footprint to the rise of experiential retail, this report uncovers the forces driving change in city shopping districts.
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1. Luxury Retail: Expanding Horizons
Luxury retail is thriving across North America’s prime urban corridors, led by flagship destinations such as SoHo (New York City), Madison Avenue (NYC), Beverly Hills Triangle (LA), and Miami’s Design District. International brands are strategically entering the U.S. market to tap into strong consumer spending and achieve omnichannel success.
Key Statistics:
– Nearly 50% of new apparel openings in major cities are in the luxury or luxury-lite segments.
– SoHo remains North America’s most active corridor, with openings from brands like Valentino, Cartier, and fast fashion players like GU (Japanese).
– Miami’s Design District embraces a younger, aspirational luxury audience with brands like Cult Gaia and Alexander Wang.
Luxury retail is also seeing significant rent growth in high-demand areas:
– Fifth Avenue, NYC: $2,257/sq. ft. (+9% YoY)
– Beverly Hills Triangle, LA: $1,000/sq. ft. (+11%)
– Newbury Street, Boston: $250/sq. ft. (+67%)
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2. Experiential Retail: More Than Shopping
Retail spaces are transforming into lifestyle destinations where shoppers can dine, play, and connect. The focus on experiential retail is revitalizing prime corridors, attracting visitors and increasing dwell time.
Notable Openings:
– F1 Arcade (Boston Seaport District): A 16,000 sq. ft. immersive racing simulator and dining experience.
– Museum of Ice Cream (Boston): Instagram-worthy, interactive fun for all ages.
– Puttshack (Philadelphia Chestnut Street): A tech-driven mini-golf venue combined with dining options.
– Dog Daze Social Club (D.C.): A unique bar concept featuring a 6,000 sq. ft. dog-friendly garden.
Cities like Boston and Philadelphia are leading in experiential openings, transforming their urban retail corridors into vibrant hubs of entertainment and activity.
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3. Dining Evolution: From Casual to High-End
The food and beverage (F&B) sector is a major driver of retail foot traffic, with both familiar favorites and unique concepts reshaping dining experiences in key cities. Philadelphia and D.C. lead the charge in new F&B openings, showcasing a mix of casual, artisanal, and experiential dining.
Key Trends:
– Specialty bakeries like Levain Bakery and Van Leeuwen Ice Cream expand to new markets.
– International dining concepts enter major urban hubs:
– Saluhall (San Francisco): A Swedish food hall from IKEA’s sister brand.
– Heytea (Boston): Chinese fruit and milk tea chain.
– All’Antico Vinaio (Los Angeles): An Italian sandwich shop from Florence.
– Unique experiences such as Barcade (Philadelphia) combine retro arcade games with craft beer.
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4. Infrastructure Upgrades: A Pedestrian-Centric Future
Cities are prioritizing the pedestrian experience to attract more shoppers and improve accessibility. Projects like New York City’s Fifth Avenue pedestrianization and Toronto’s Queen Street West transit improvements are reshaping retail corridors for the future.
Key Projects:
– Montréal: Sainte-Catherine Street’s revitalization focuses on widening sidewalks and creating green spaces.
– Philadelphia: The new 76ers Arena on Market East promises to bring entertainment and retail together, transforming the corridor into a high-traffic destination.
While construction disruptions pose short-term challenges, these initiatives aim to create long-term growth by making urban shopping more accessible and attractive.
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5. Post-Pandemic Retail Investment Boom
The urban retail investment landscape is thriving as investors flock to prime corridors to capitalize on recovery trends. The report highlights a significant rise in single-asset transaction volumes, reaching a five-year high of $2.4 billion.
Top Transactions:
– 717 Fifth Avenue (NYC): Sold for $963 million (Q1 2024).
– Wilshire Rodeo Plaza (Beverly Hills): $211 million (Q3 2024).
– 666 Fifth Avenue (NYC, 52% stake): $350 million (Q3 2024).
This surge reflects strong investor confidence in the resilience and future growth of urban retail corridors.
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6. Tourism and Foot Traffic Recovery
International tourism is on the rise, bolstering retail demand in gateway cities like New York, Miami, and Los Angeles. While tourism has yet to fully recover to pre-pandemic levels, cities are seeing significant improvements:
– International Visitors to the U.S.:
– 2019: 79 million
– 2023: 66 million
– 2024 (YTD): Projected to approach 2019 levels.
Foot traffic recovery is uneven but promising:
– NYC Foot Traffic: Up 10.1% compared to 2019.
– Miami: Leading with a 19.2% increase.
– Boston: Strong at 7.6% growth.
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Looking Ahead: The Future of City Retail
The City Retail 2025 report reveals a resilient, dynamic urban retail landscape where luxury, experiential retail, and innovative dining concepts converge. Infrastructure improvements and growing investor interest are setting the stage for a new era of urban shopping.
Key Takeaways:
– Luxury corridors remain in high demand, with rents rising and supply tight.
– Experiential retail and dining are redefining the purpose of retail spaces.
– Infrastructure projects are creating pedestrian-friendly, accessible shopping destinations.
– Urban retail investment is booming, signaling confidence in the market’s long-term prospects.
As cities adapt to post-pandemic trends, prime urban corridors will continue to serve as centers of innovation, culture, and commerce.
For more insights, contact JLL Research or explore the full City Retail 2025 report to stay ahead of the trends shaping urban retail markets.