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Westside Future Fund Retail Baseline (in progress)

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Bleakly Advisory Group is conducting a retail study as part of the Westside Future Fund's Land-Use Action Plan.

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Westside Future Fund Retail Baseline (in progress)

  1. 1. March 2016 DRAFT – In Progress LAND-USE ACTION PLAN RETAIL MARKET BASELINE ANALYSIS
  2. 2. Westside Future Fund Land Use Action Plan Retail Market Analysis STUDY AREA BOUNDARIES Study Area MARTA Station Area .25-mile Radius Beltline H.E.Holmes
  3. 3. Westside Future Fund Land Use Action Plan Retail Market Analysis 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?
  4. 4. Westside Future Fund Land Use Action Plan Retail Market Analysis  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)
  5. 5. Westside Future Fund Land Use Action Plan Retail Market Analysis DEMAND  Retail demand in the Study Area currently comes from four main groups, driven largely by residents and college students from the AUC. Local employees and tourists make up the remaining demand segments.  The impact of these groups could shift over time with additional employment opportunities and BeltLine development. Residents Employees Tourists College Students
  6. 6. Westside Future Fund Land Use Action Plan Retail Market Analysis  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
  7. 7. Westside Future Fund Land Use Action Plan Retail Market Analysis  Population in the Study Area decreased dramatically 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 Atlanta 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
  8. 8. Westside Future Fund Land Use Action Plan Retail Market Analysis 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  Population density is greatest in the western portion of the Study Area.  Greater population density will help drive retail demand.  Overall, city of Atlanta population density: 3,413 persons per Square Mile DEMAND POPULATION DENSITY Source: ESRI
  9. 9. Westside Future Fund Land Use Action Plan Retail Market Analysis  The number of households in the study area decreased by 26% from 2000 to 2010 and  Households in the Study Area tend to be slightly larger than those citywide. 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) Source: Bleakly Advisory Group based on data from Nielsen, Inc. Annual Household Growth DEMAND HOUSEHOLDS
  10. 10. Westside Future Fund Land Use Action Plan Retail Market Analysis  City of Atlanta median income is more than double that of the Study Area.  Retailers look closely 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 Source: Bleakly Advisory Group based on data from Nielsen, Inc. DEMAND INCOME
  11. 11. Westside Future Fund Land Use Action Plan Retail Market Analysis Based on Data from ESRI 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 below most typical income thresholds to attract a large number of national retail chains.  Provides opportunity to meet retail demand with local retail options. DEMAND INCOME Source: ESRI
  12. 12. Westside Future Fund Land Use Action Plan Retail Market Analysis Based on Data from ESRI RETAIL SPENDING DEMAND Total Retail Spending/HH By Census Tract  Because Study Area households are below average income thresholds, current retail spending in the area, while significant, is below more affluent locations. Source: ESRI
  13. 13. Westside Future Fund Land Use Action Plan Retail Market Analysis  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
  14. 14. Westside Future Fund Land Use Action Plan Retail Market Analysis  The top three retail store types:  Motor Vehicle & Parts Dealers  Food & Beverage  Foodservice & Drinking Places account for 43% of retail spending by Study Area residents.  This spending pattern is TYPICAL of most American retail 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 Source: Bleakly Advisory Group based on data from Nielsen, Inc. DEMAND
  15. 15. Westside Future Fund Land Use Action Plan Retail Market Analysis  The difference between demand and supply represents an opportunity gap.  The positive values by store type in the area signifies “leakage” of retail spending to locations outside of the local market area.  Nearly all store categories in the Study Area show retail demand potential to capture retail 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 Source: Bleakly Advisory Group based on data from Nielsen, Inc.
  16. 16. Westside Future Fund Land Use Action Plan Retail Market Analysis Based on Data from ESRI DEMAND RETAIL OPPORTUNITY GAP ANALYSIS Total Retail Opportunity Gap By Block Group  Nearly all block groups west of Lowery Blvd. show opportunities to capture retail leakage. Source: ESRI
  17. 17. Westside Future Fund Land Use Action Plan Retail Market Analysis 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  Traffic counts show that Study Area roads are generally local-serving.  National retailers typically seek at least 15,000 ADT and above for new store placement.  Northside Drive provides the heaviest auto traffic counts in the Study Area (22,000+ ADT).
  18. 18. Westside Future Fund Land Use Action Plan Retail Market Analysis Downtown Atlanta Study Area 3-Mile Radius from MLK/Lowery 0 366,000 Based on Data from CoStar SUPPLY  While retail demand generally outpaces supply within the Study Area boundaries, significant retail nodes are located nearby.
  19. 19. Westside Future Fund Land Use Action Plan Retail Market Analysis 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 Study Area City of Atlanta 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
  20. 20. Westside Future Fund Land Use Action Plan Retail Market Analysis  Since the Great Recession, the Study Area’s share of the City’s occupied retail space has been below the share of total space.  The Study Area’s share of the city’s retail space has remained relatively 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% 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 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
  21. 21. Westside Future Fund Land Use Action Plan Retail Market Analysis 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
  22. 22. Westside Future Fund Land Use Action Plan Retail Market Analysis  Since the onset of the Great Recession retail vacancy rates in the Study Area have remained above the city of Atlanta rate. VACANCY 0% 2% 4% 6% 8% 10% 12% 14% 16% 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 QTD Study Area City of Atlanta SUPPLY Source: Bleakly Advisory Group, based on data from CoStar
  23. 23. Westside Future Fund Land Use Action Plan Retail Market Analysis  Retail rents in the Study Area have remained significantly lower than citywide rents since 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 Study Area City of Atlanta SUPPLY Source: Bleakly Advisory Group, based on data from CoStar

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