Retail Market Analysis Solution

Solution:
1. Total income = 11,000 x $35,000 = $385,000,000
2. Retail sales potential = $385,000,000 x (1 - 25% - 45%) = $115,500,000
3. Retail sales by subject type = $115,500,000 x 20% = $23,100,000
4. Sales retention = $23,100,000 x 80% = $18,480,000
5. Primary sales sf required = $18,480,000 / $250 psf = 73,920 sf
6. Plus: Secondary sales = 73,920 x 1.15 = 85,008 sf
7. Plus: Frictional vacancy = 85,008 / (1 – 5%) = 89,482 sf
8. Less: Existing, U.C., propose = 250,000x20% + 50,000x25% + 40,000x15% = 68,500 sf
9. Shortage of space (next 5 years) = 89,482 sf – 68,500 = 20,982 sf