Westside Future Fund Retail Baseline (in progress)

March 2016

DRAFT – In Progress

LAND-USE ACTION PLAN

RETAIL MARKET

BASELINE ANALYSIS

Westside Future Fund Land Use Action Plan Retail Market Analysis

STUDY AREA BOUNDARIES

Study Area

MARTA Station Area .25-mile Radius

Beltline

H.E

. H

olm

es


How many people might shop there?

What competition is there already?

RETAIL REALITY: SITE SELECTION

DEMAND

SUPPLY

SITE

SPACE Which space best suits retailer ’s needs?

Which location will generate the most sales?


How many people might shop there?

Demographics – population, household incomes (or total purchasing power), characteristics, future growth

Retailers need to attract a certain number of people at certain income levels in order to survive

Travel patterns – primary travel routes, traffic counts

DEMAND

Store Type Pop. Necessary to Support

Corner Store 500

Convenience Store 2,000

Delicatessan and Bakery 3,000

Snack Bar 3,000

Beauty Parlor 3,000

Drug Store 5,000

Hardware Store 5,000

Bank Branch 5,000

Supermarket 10,000

Thresholds of Community Stores (Rules of Thumb)


DEMAND Retai l demand in the Study Area currently comes from four main groups, driven

largely by residents and col lege students from the AUC. Local employees and tourists make up the remaining demand segments.

The impact of these groups could shift over t ime with addit ional employment opportunit ies and BeltLine development.

Residents

Employees Tourists

College

Students


How many people might shop there ?

Retailers typically follow demand with differing requirements for their stores.

Westside Study Area meets some, not all, of the national chain requirements.

Examples:

DEMAND

Store Trade Area Population Location/Other

National Drug

Store

2 mile radius 20,000 Intersection of two

main streets with

significant traffic

counts

Grocery Store 3 mile radius

20,000+ On high-visibility,

high traffic corridor

Pet Supermarket 3 mile radius 50,000 25,000 daily vehicle

traffic count

Firehouse Subs 3 mile radius 20,000+ $35,000 median

household income

Denny's 3 mile radius 40,000 30,000 daily vehicle

traffic count


Populat ion in the Study Area decreased dramatical ly from 2000 to 2010, but is currently trending upwards.

Projected to recover to 79% of 2000 population by 2021.

Study Area accounts for 6.6% of At lanta residents compared to 9.1% in 2000.

POPULATION

70%

75%

80%

85%

90%

95%

100%

105%

110%

115%

120%

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Study Area

City of Atlanta

Relative Population Growth Index , 2000 to 2021

Population Study Area City of Atlanta

2000 Census 38,203 418,156

2010 Census 29,494 420,003

2016 Estimate 29,964 454,629

2021 Projection 30,255 479,455

Avg. Annual Growth 2000-2010 -2.6% 0.0%

Avg. Annual Growth 2010-2016 0.3% 1.3%

Avg. Annual Growth Forecast 2016-2021 0.2% 1.1%

Source: Bleakly Advisory Group based on data from Nielsen, Inc.

DEMAND


Persons per Square Mile, By Block Group

116,000 – 618,000

22,000 – 116,000

4,000 – 22,000

1,000 – 4,000

0 – 1,000

Based on Data from ESRI

Populat ion density i s greatest in the western port ion of the Study Area.

Greater population density will help drive retail demand.

Overal l , c i ty of At lanta populat ion density : 3 ,413 persons per Square Mi le

DEMAND POPULATION DENSITY

Source: ESRI


The number of households in the study area decreased by 26% from 2000 to 2010 and

Households in the Study Area tend to be sl ight ly larger than those c itywide.

Households Study Area

City of Atlanta

2000 Census 13,197 169,050

2010 Census 9,822 185,484

2016 Estimate 10,089 207,248

2021 Projection 10,366 222,710

Avg. Annual Growth 2000-2010 -2.9% 0.9%

Avg. Annual Growth 2010-2016 0.4% 1.9%

Avg. Annual Growth Forecast 2016-2021 0.5% 1.4%

2016 Est. Avg. Household Size 2.35 2.04

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

CAGR 2000-2010 CAGR 2010-2016 CAGR 2016-2021

Study Area

City of Atlanta

2000-2010 2010-2016 2016-2021 (Forecast)


Annual Household Growth

DEMAND HOUSEHOLDS


City of At lanta median income is more than double that of the Study Area .

Retai lers look c losely at median household income in deciding where to locate.

10

Household Income Study Area City of Atlanta

2016 Est. Median Household Income $ 24,047 $ 48,878

% of City Median Income 49% 100%

Households by Income

HH with income >$15K 3,318 33% 41,108 20%

HH with income $15K - $35K 3,147 31% 41,037 20%

HH with income $35K - $50K 1,351 13% 23,216 11%

HH with income $50K - $100K 1,686 17% 49,885 24%

HH with income > $100K 588 6% 52,002 25%

0% 5% 10% 15% 20% 25% 30% 35%

Less than $15K

$15K - $35K

$35K - $50K

$50K - $100K

More than $100K

Study Area City of Atlanta

Annual Household Income


DEMAND INCOME



Median Household, Income,

By Block Group

$105,000 – $200,000

$73,000 – $105,000

$42,000 – $73,000

$10,000 – $42,000

$0 – $10,000

Study Area households are be low m ost ty p ica l income thresholds to att rac t a l a rge num ber o f nat iona l reta i l cha ins .

Prov ides opportuni ty to m eet reta i l dem and wi th loca l reta i l opt ions.

DEMAND INCOME

Source: ESRI



RETAIL SPENDING

DEMAND

Total Retail Spending/HH By

Census Tract

B ecause S tudy Area households are be low average income thresholds , current reta i l spending in the area , wh i le s ign i f icant , i s be low m ore aff luent locat ions.

Source: ESRI


Westside Study Area spending supports 1.5 million square feet of retail currently (not including motor vehicles & parts)

2/3 of that spending takes place outside of the Westside Study Area.

Total Annual Resident

Consumer Expenditures

Supportable

Square Feet

Current Study Area

Occupied Retail Square

Feet

Westside Study

Area $372,769,436 1,500,000+/- 820,000

DEMAND

Source: Bleakly Advisory Group, based on data from Nielsen, Inc.

RETAIL SPENDING & SUPPORTABLE SQUARE FEET


The top three retai l store types:

Motor Vehicle & Parts Dealers

Food & Beverage

Foodservice & Drinking Places

account for 43% of retai l spending by Study Area residents .

This spending pattern is

TYPICAL of

most American retai l trade areas.

CURRENT STUDY AREA RETAIL SPENDING BY STORE TYPE

Motor Vehicle & Parts Dealers, $71,972,352

Furniture & Home Furnishings Stores,

$7,472,734

Electronics & Appliances Stores, $10,267,602

Building Material, Garden Equipment Stores, $38,415,840

Food & Beverage Stores, $60,595,683

Health & Personal Care Stores, $24,253,663

Gasoline Stations,

$33,153,890 Clothing & Clothing Accessories Stores,

$22,321,428

Sporting Goods, Hobby, Book, Music Stores,

$11,230,418

General Merchandise Stores, $52,714,646

Miscellaneous Store Retailers, $12,988,608

Non-Store Retailers, $41,161,455

Foodservice & Drinking Places, $58,193,467


DEMAND


The difference between demand and supply represents an opportunity gap.

The posit ive values by store type in the area signif ies “leakage” of retai l spending to locat ions outside of the local market area.

Nearly a l l store categories in the Study Area show retai l demand potential to capture retai l spending “leakage” back into the Study Area.

Opportunity Gap – Retail Stores, Westside Study Area

-$20,000,000 -$10,000,000 $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000

Furniture & Home Furnishings Stores

Electronics & Appliances Stores

Building Material, Garden Equip Stores

Grocery Stores

Health & Personal Care Stores

Clothing & Clothing Accessories Stores

Sporting Goods, Hobby, Book, Music Stores

General Merchandise Stores

Miscellaneous Store Retailers

Foodservice & Drinking Places

Current Over-Supply Current Under-Supply

DEMAND RETAIL OPPORTUNITY GAP ANALYSIS




DEMAND RETAIL OPPORTUNITY GAP ANALYSIS

Total Retail Opportunity Gap By

Block Group

Nearly a l l block groups west of Lowery Blvd. show opportunit ies to capture retai l leakage.

Source: ESRI


1

2

3 4

5

6 7 8

9

10

1. 17,400 2. 17,300 3. 3,750

4. 8,270 5. 15,800 6. 4,200

7. 13,000 8. 5,090 9. 8,130

10. 22,800

2014 GADOT Traffic Counts (ADT - Avg. Daily Trips)

DEMAND TRAFFIC COUNTS

Source: Bleakly Advisory Group based on data from GDOT

Traff ic counts show that Study Area roads are general ly local-serving.

National retai lers typical ly seek at least 15,000 ADT and above for new store placement.

Northside Drive provides the heaviest auto traff ic counts in the Study Area (22,000+ ADT).


Downtown

Atlanta

Study Area

3-Mile Radius

from

MLK/Lowery

0

366,000

Based on Data from CoStar

SUPPLY

While retai l demand general ly outpaces supply within the Study Area boundaries, s ignif icant retai l nodes are located nearby.


OVERVIEW

Year Total SF Avg.

SF/Bldg. Vacant SF % Vacant Annual

Absorption Avg Rent

2015 913,894 9,422 94,327 10.3% 500 $ 6.24

2014 913,894 9,422 82,677 9.0% (11,650) $ 6.24

2013 913,894 9,422 88,367 9.7% 5,690 $ 6.39

2012 913,894 9,422 132,600 14.5% 44,233 $ 6.67

2011 913,894 9,422 111,041 12.2% (21,559) $ 6.34

2010 909,894 9,478 119,800 13.2% 12,759 $ 5.75

2009 907,734 9,555 118,670 13.1% 1,030 $ 6.92

2008 907,734 9,555 110,370 12.2% (8,300) $ 7.91

2007 907,734 9,555 40,800 4.5% (69,570) $ 6.35


Total SF 913,894 61,411,089

Avg. SF/Bldg. 9,422 12,683

Vacant SF 94,327 3,750,077

% Vacant 10.3% 6.1%

Annual Absorption 500 103,405

Avg Rent $ 6.24 $ 15.55

SUPPLY

Source: Bleakly Advisory Group, based on data from CoStar


Since the Great Recession, the Study Area’s share of the City ’s occupied retai l space has been below the share of total space.

The Study Area’s share of the c ity ’s retai l space has remained relat ively stable, dropping by approximately 0.2% over the past decade.

1.0%

1.1%

1.2%

1.3%

1.4%

1.5%

1.6%

1.7%

1.8%

2000Q1

2001Q1

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

2011Q1

2012Q1

2013Q1

2014Q1

2015Q1

QTD

Total SF

Occupied SF

Study Area Share of City of Atlanta Retail Square Feet

STUDY AREA SHARE OF RETAIL VS. CITY OF ATLANTA

SUPPLY

Source: Bleakly Advisory Group, based on data from CoStar


ANNUAL ABSORPTION

(100,000)

(50,000)

-

50,000

100,000

150,000

200,000

250,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

(500,000)

-

500,000

1,000,000

1,500,000

2,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Study Area Annual Retail Space Absorption

City of Atlanta Annual Retail Space Absorption

SUPPLY

Source: Bleakly Advisory Group,

based on data from CoStar


Since the onset of the Great Recession retai l vacancy rates in the Study Area have remained above the c ity of At lanta rate.

VACANCY

0%

2%

4%

6%

8%

10%

12%

14%

16%

2000Q1

2001Q1

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

2011Q1

2012Q1

2013Q1

2014Q1

2015Q1

QTD

Study Area

City of Atlanta

SUPPLY




Retai l rents in the Study Area have remained signif icantly lower than c itywide rents s ince 2008.

AVERAGE RENT

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 QTD


SUPPLY



Westside Future Fund Retail Baseline (in progress)

Retail

Transcript of Westside Future Fund Retail Baseline (in progress)