Retail and restaurants have been major players in Montgomery County's mixed-use landscape for years, but will that trend continue in future development? What form will retail take with the growth of online shopping? Will residential uses replace older shopping centers? Our speakers will take a look at the behavioral changes and demographic shifts in the county and how those relate to retail development. They'll also address how pieces like transit, multifamily, and office fit into the development puzzle.

1. ConnecttoWi-Fi:
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Password:
Rise@7600

2. The Future of Retail:
Montgomery County

3. Land Use Attorney and Department Chair
Lerch, Early & Brewer
Pat Harris
Opening Remarks

4. Director of Research & Analysis
Streetsense
EVP & President of Mixed-Use Division
Federal Realty Investment Trust
Heather Arnold Chris Weilminster
Keynote Presentation

5. Federal Realty Snapshot
105
Properties in Strategic
Metropolitan Markets
Gross Leasable Area
24.3M
Average Population
(within 3 miles)
157K
Average HHI
(within 3 miles)
$117K
NORTHERN
CALIFORNIA
SOUTHERN
CALIFORNIA
WASHINGTON D.C.
VA/NC
BALTIMORE
WASHINGTON D.C.
VA/NC
BALTIMORE
PHILADELPHIA
NY/NJ/CT
BOSTON
SOUTH FLORIDA

6. How Will Retail Trends
Affect Future Development
in Montgomery County?

7. T O P I C 1
To foresee the future of retail, you
need to examine Montgomery
County retail in its regional context.

8. Montgomery County by the Numbers
RETAIL STATISTICS
$49,584
Average Annual Retail
Spending per HH
Median Age
39.2
Median HH Income
$99,233
Population
1.05 M
24,740,297 SF
Retail-occupied Space
Retail Vacancy Rate
6.8%
Total Stores & Restaurants
5,615
Largest Retail by # of Stores
7-Eleven
(49)
Largest Retail by Total SF Occupied
1.2 M SF

9. 1 Billion will need to be demolished or
repurposed to achieve market equilibrium.
CoStar February 2017
13B SF
of retail in US

10. “ W E A R E N ’ T
O V E R R E TA I L E D .
W E ’ R E U N D E R
D E M O L I S H E D . ”
Daniel Hurwitz, GGP

11. Shopping Center GLA
(sq ft, MM) 2015*
Population
(MM)
GLA Per Capita
U.S. 7,567 321 23.5
Canada 589 36 16.4
U.K. 299 65 4.6
France 254 66 3.8
Spain 157 46 3.4
Italy 169 61 2.8
Germany 191 81 2.4
*France + Germany 2014 Cowen and Company
Shopping Space per Person, by Country
Montgomery
County:
24sf per capita

12. 12
Properties
GLA
2.65 Million
Occupancy
94%
Residential
1,520 Units
Office
325,000 SF
Investment in the County
Over $1.3 Billion
FRT Montgomery
County Portfolio

13. Case Study
Q U I N C E O R C H A R D
Gaithersburg, MD
Acquired:
1993
Initial Investment:
$11.1 Million
Redevelopment Cost:
$16.2 Million
Incremental Value Creation:
Over $71.5 Million
GLA
165K sf retail
102k office
Incremental ROI:
22%

14. Q U I N C E O R C H A R D T H E N

15. Q U I N C E O R C H A R D T O DAY

16. Q U I N C E O R C H A R D T O DAY

17. T O P I C 2
The future of retail is
fundamentally different than
what we’ve known until now.

18. Household Retail Spending:
50%
Neighborhood
Goods + Services
30%
Food +
Beverage
20%
General
Merchandise
9%
Ecommerce

19. myf.red/g/f32k
80
120
160
200
240
280
320
360
1995 2000 2005 2010 2015
fred.stlouisfed.org
Source: U.S. Bureau of the Census
Retail Sales: Total (Excluding Food Services), Jan 1992=100
Retail Trade: Food Services and Drinking Places, Jan 1992=100
Index
Does anyone cook at home anymore?

20. R E TA I L I S M O R E T H A N S H O P S

21. Case Study
B E T H E S DA R O W
Bethesda, MD
Acquired:
1993
Property Size:
11.5 acres
GLA:
534,000 SF
Retail:
387,000 SF
Office:
147,000 SF
Residential:
180 apartments

22. Bethesda Row | Highlights
Demographic Changes (3-Mile Radius Growth
1989 1990 2000 2010 2016 1980-2016 2010-2016
Avg HHI $41,352 $89,612 $134,115 $154,156 $210,490 409% 36.5%
Population 125,526 122,404 129,375 133,333 146,529 16.7% 9.9%
Initial Investment:
$18.8 Million
Investment as of Today:
$268 Million
NOI Yield:
9.5%
Tenant Count:
105
Avg. Sales PSF:
$848
FEATURED RETAILERS
GIANT
MORLEY
RIO GRANDE CAFE’
APPLE
LULULEMON ATHLETICA
BLUEMERCURY
WILLIAMS-SONOMA
SUGARFINA
WARBY PARKER
RAKU
MON AMI GABI
LE PAIN QUOTIDIEN
EQUINOX FITNESS CLUB
KAPNOS KOUZINA
GIANT
BARNES
& NOBLE
APPLE

23. Bethesda Row | Future Opportunities
Current Zoning
FAR 2.25
Height 45’
Proposed Zoning
FAR 2.25
Height 70’
Current Zoning
FAR 5.0
Height 145’
Proposed Zoning
FAR 5.0
Height 250’
Bethesda Downtown
Sector Plan

24. T O P I C 3
The future of retail is
multivariate—not just rooftops,
but employment centers.

26. Auto-Oriented,
Single Use
Metro-Served,
Mixed Use
9.6%
1995 2014
15.7%
21.1%
9.5%
Vacancy Rate by Location Type
Montgomery County

27. Case Study
P I K E & R O S E
North Bethesda, MD
Acquired:
1982
Retail:
387,000 sf
Office:
80,000 sf
Residential:
765 apartments
99 condos
Hotel:
177 rooms

28. 270
270
495
495
495
66
ROCKVILLE
WASHINGTON, D.C.
BALTIMORE (BWI)
NATIONAL (DCA)
370
200
95
NORTH BETHESDA
BETHESDA
TYSONS
REGIONAL ACCESS
DULLES (IAD)
Montrose Parkway
Montrose Parkway
TowneRoad
TowneRoad
RockvillePike
Executive Boulevard
Old Georgetown Road
RockvillePike
OldGeorgetownRoad
OldGeorgetownRoad
Executive Boulevard
Market Street
270 495
270
2 MILES
2.5 MILES 4 MILES

29. O R I G I N A L S I T E

30. M I D - P I K E P L A Z A

31. Demographics | 3 mile radius
KEY FACTS
155,998
Population
40.4
Median Age
2.6
Average
Household Size
$99,015
Median Household
Income
HHI & EDUCATION
61%
Bachelor's/Grad/Prof
Degree
BUSINESS
6,674
Total Businesses
97,935
Total Employees
EMPLOYMENT
74%
White Collar
10%
Blue Collar
16%
Services
4.0%
Unemployment
Rate
134,550
2017 Average
Household Income

32. P H A S E 1
Block 10:
11,800 SF Retail
319 Apartments
Block 11:
106,600 SF Retail
80,000 SF Office
Block 12:
40,600 SF Retail
174 Apartments
Block 13:
Renovation
12,000 SF Retail

33. Block 7: 99 Condos / 177 Hotel Rooms / 32,000 SF Retail
Block 6: 44,000 SF Retail / 272 Apartments
Block 8: 36,000 SF Retail
Block 4: 28,000 SF Retail
Block 1A: 50,000 SF Retail
Block 3: 26,000 SF Retail
P H A S E 2

34. P I K E & R O S E T O DAY

35. F U L L B U I L D - O U T
Estimated
Project Totals
TOTAL
3.5 Million SF
Commercial Space
Retail
490,000 SF
Office
1 Million SF
Residential
1,365 Apartments
99 Condos
Hotel
177 Rooms

36. Montgomery County Retail Trends
Director of Research & Analysis
Streetsense
Heather Arnold
Partner
Roadside Development
Jeff Edelstein
MODERATOR
Land Use Attorney & Principal
Lerch, Early & Brewer
Partick O’Neil
Senior Vice President
Regency Centers
Krista Di Iaconi
EVP & President of Mixed-Use Division
Federal Realty Investment Trust
Chris Weilminster