by David Segal, MAI, Director, Valuation & Advisory
This is the first post in a four part series examining retail density in Northern California, Southern California, and the Five Boroughs of New York City.
On the most basic level, the amount of retail per square mile of land gives some kind of measure of retail concentration. By observing the existing retail in select urban geographies, we’re able to gauge the upper limits of retail inventory. In this four part series, we examine retail square footage per capita, per household, as a function of purchasing power, and per square mile of land for three key geographies—Northern California/Bay Area, Southern California, and New York City—to determine retail density of these major metropolitan areas.
The nine-county Bay Area is a well-connected geography that is large enough to make inferences from and diverse enough to apply to other areas throughout the country. The relationship between retail square footage and population density (number of people per square mile), retail square footage and purchasing power per square mile, and retail square footage per housing density (number of households per square mile) is shown in the following tables and charts (click to expand).
San Francisco County is removed from Charts 1.1 to 1.3 since it distorts the presentation. It is an outlier with nearly 10 times greater population, income, and household density than the second most dense county in the bay area. However, it is interesting to note that if San Francisco County is included in the data set, then the same linear relationship is observed. This is surprising because one would expect economies of scale to have an impact and the relationship to decay; that is, for the relationship to be non-linear or logarithmic. This relationship is shown in Chart 1.4.
INTERESTING THINGS TO NOTE:
- Excluding San Francisco, total retail square footage per capita in the eight counties ranges from 40.0 to 50.0 square feet per person. The best fit (from linear regression) indicates a relationship of 42.0 square feet per person. San Francisco County indicates 57.7 square feet of retail per capita. This amount is above the range of the other eight-counties and can likely be attributed to San Francisco being a major tourist destination.
- Excluding San Francisco, the range based on purchasing power is 1,134 to 1,998 square feet per $1 million. The best fit (from linear regression of the eight counties) indicates a relationship of 1,198 square feet per $1 million. San Francisco County indicates 1,477 square feet per $1 million. This is within the range of the other eight counties. This result is unexpected given the above average amount of retail square footage per capita.
- Excluding San Francisco, the range for the entire nine counties is 120 to 146 square feet per household. The best fit (from linear regression of the eight counties) indicates a relationship of 126 square feet per household. San Francisco County indicates 142 square feet per household. This amount is near the high end of the range, which we should expect given the other statics presented.
Up Next: Retail Density in Southern California Counties
David Segal, MAI, is a Director in Cushman & Wakefield’s Valuation & Advisory group. He specializes in the valuation of all retail properties, including malls, power centers, and both anchored and unanchored shopping centers.