Montana Avenue Thrives as Santa Monica's Booming Retail District, Contrasting With Struggling Promenade

Santa Monica's Montana Avenue is emerging as the city's vibrant, unofficial downtown, offering a successful model of retail that stands in sharp contrast to the struggles faced by the traditional shopping areas.

While the Third Street Promenade and Santa Monica Place are plagued by empty storefronts, trash-strewn sidewalks, and a general sense of decline, the tree-lined corridor of Montana Avenue, particularly between 7th and 17th Streets, boasts a low vacancy rate of just seven out of over 150 shops. This affluent stretch has cultivated a community atmosphere, often compared to the fictional town of Stars Hollow from "Gilmore Girls," with locals and affluent shoppers frequenting its boutiques and cafes.

Commercial real estate broker Jay Luchs of Newmark described Montana Avenue as a highly sought-after retail location where available space is scarce. "For every space that looks empty, there’s a tenant going in," Luchs stated. "There’s really no space."

He noted that Montana Avenue is among a select group of locations, including Abbot Kinney in Venice and the Brentwood Country Mart, that are bucking the broader retail downturn affecting the Los Angeles region. The success of these areas, Luchs explained, is tied to their strong community feel and appeal to brands.

Montana Avenue's appeal lies in its unique mix of independently owned boutiques, restaurants, and familiar businesses, all within walking distance of affluent residential neighborhoods. This reliance on local foot traffic provides a buffer against broader retail challenges. Some shops have been fixtures on Montana for over four decades, fostering generations of loyal customers.

While rents on Montana Avenue are not insignificant, typically ranging from $8 to $12 per square foot per month, they are considerably lower than those on other fashionable streets like Abbot Kinney Boulevard in Venice (above $20 per square foot) or Beverly Drive in Beverly Hills ($25 to $30 per square foot). Even the Third Street Promenade, despite its issues, averages around $12 per square foot, but its larger storefronts can result in higher overall costs.

The street's success is also attributed to its focus on community and its inability to be replicated. "It’s not trying to be downtown — instead leaning into its magical mix of small store charm and restaurants," Luchs said. This neighborhood-first approach has transformed Montana Avenue into a destination for locals, not just a place for transactional shopping.

The avenue has also served as a refuge for businesses displaced by the devastating fires in the Pacific Palisades in January 2025. Pamela Hayer, owner of the children's boutique Keetan, relocated her store to Montana Avenue after her previous location was destroyed. She found that while many of her initial clients were from the Palisades, her customer base has increasingly shifted to Santa Monica locals.

Despite the overall success, some businesses on Montana Avenue have also experienced challenges, particularly following the Palisades fires. Some shop owners noted a decline in foot traffic as residents from the affected areas were displaced. Carolina Hummel, who works at Bijou Indochine, a jewelry and vintage boutique, described the post-fire period as difficult, with the loss of a regular customer community.

Erin, a stylist at Gramercy, a clothing boutique, echoed these sentiments, stating that traffic has decreased significantly since the fires, impacting business. However, she still views the neighborhood positively, citing its safety, quality offerings, and lack of visible homelessness as key advantages.

In contrast, the Third Street Promenade faces significant challenges. Reports indicate a high number of vacant storefronts, homeless encampments, and a general feeling of neglect. This decline is attributed to a variety of factors, including rising rents and a changing retail landscape that has seen many national chains shutter stores.