Prince Georges County Office of the County Executive David S. - - PowerPoint PPT Presentation

Prince George’s County Office of the County Executive

David S. Iannucci, Assistant Deputy Chief Administrative Officer Brad Frome, Assistant Deputy Chief Administrative Officer

Prince George’s County Economic Development Corporation

Larry Hentz, Director of Business Development

Prince George’s County Department of Housing and Community Development

Eric C. Brown, Director

Prince George’s County Redevelopment Authority

Stephen J. Paul, Associate Director

Prince George’s County Council

The Honorable Dannielle M. Glaros, Councilmember (District 3) Jackie W. Brown, Committee Director, Planning, Zoning and Economic Development (PZED) Committee

Prince George's County, Maryland Conference & Visitors Bureau, Inc.

• J. Matthew Neitzey, CAE, CDME, CEcD, Executive Director

Prince George’s County Planning Department

Jacqueline Philson, Master Planner, Project Manager/Facilitator Derick Berlage, Chief, Countywide Planning Division Ivy A. Lewis, Chief, Community Planning Vanessa C. Akins, Chief, Strategy and Implementation Ted Kowaluk, Planner Coordinator

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About the RCLCO team

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RCLCO is a land use economics

firm delivering real estate strategies, market intelligence, and implementation assistance.

Practice Groups

 Public Strategies  Community Development  Urban Development  Management Consulting  Institutional Advisory Offices  Washington, DC  Los Angeles  Austin  Orlando

Agenda

 Project Overview  Countywide Retail Market Analysis  Countywide Retail Opportunity Analysis High-End/Luxury Retail Consumer Marketability Analysis  Focus: Southwest and Southeast Trade Areas  Questions

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COUNTYWIDE RETAIL MARKET ANALYSIS

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Surveyed Qualitative and Quantitative Factors for 241 Shopping Centers & 10 Main Streets

tenant quality building vacancy surrounding land uses

46.5% 36.1% 9.5% 4.1% 1.2% 0.4% 2.1% Strip/Convenience Neighborhood Community Power Lifestyle Outlet Regional/Super- Regional 0.0% 20.0% 40.0% 60.0%

Shopping Centers by Type

116 31 33 59 2

North Market Central Inside 495 Market Central Outside 495 Market Southwest Market Southeast Market

Shopping Centers by Trade Area

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Power Center Tenant Strip Center Tenant In-Line Tenant

Discount Stores Replace Department Stores Fitness Center In Anchor Space Strip Tenants In Community Center Space

47 69 117 8 20 40 60 80 100 120 140 A B C F/Defunct Number of Shopping Centers Rating of Center Quality

County Shopping Center Distribution by Center Rating



County has potential to capture additional $1.4 billion retail sales annually



Retail sales = $7.2 billion



Retail demand = $8.6 billion



Spending gap = $1.4 billion annually that the County could capture

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$7,222,066,667 $8,594,982,688 $6,500,000,000 $7,000,000,000 $7,500,000,000 $8,000,000,000 $8,500,000,000 $9,000,000,000 Total Retail Sales Generated incl. Estimated Grocery Total Retail Demand

Sales and Demand Gap = $1.4B

LEAKAGE SURROUNDING THE PRINCE GEORGE’S COUNTY RETAIL MARKET

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THE COUNTY HAD DEMAND FOR 22.2 MILLION SQUARE FEET OF RETAIL SPACE IN 2014

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By 2020: Demand will support 24.1 million square feet By 2025: Demand will support 25.6 million square feet

1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 Supportable Square Footage Current 2014 Supportable by 2020 Supportable by 2025

163 122 154 185 178 405 113 230 191 74 1,000 2,000 3,000 4,000 5,000 6,000 Thousands 2014 Demand 2020 Additional Demand

Retail Supply-Demand Within Trade Areas

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North Central Outside Southwest Central Inside South east

CO COUNTY TY HAS ST AS STRONG UN UNDER DERSER SERVED VED MI MIDD DDLE LE

WITHIN EXTREMELY AFFLUENT REGION

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11% 3% 22% 33% 9% 27% 21% 8% 20% 21% 25% 19% 22% 31% 27% 32% 32% 33% 13% 11% 14% 8% 9% 12%

11% 13% 6% 5% 13% 2%

4% 9% 2% 1% 7% 4% 10% 22% 7% 1% 7% 3% Washington- Baltimore Region Prince George's County Montgomery County Howard County Anne Arundel County Fairfax County

First Second Third Fourth Fifth Sixth Seventh

Prince George’s top 30-40% of consumers likely underserved by available retail in County Region and nearby counties have 30- 40% of consumers in top spending tiers; County only has 11%

1st ($145,649) 2nd ($100,269) 3rd ($80,740) 4th ($59,134) 5th ($53,514) 6th ($42,114) 7th ($36,240)

Consumer Segment Tier (Median Income)

WHA WHAT T IS IS HIGH HIGH END/L END/LUXUR UXURY Y RET RETAIL? AIL?

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Luxury

High-quality, high-status products sold at full retail price. Exclusive products not available at other stores that convey prestige based on brand name. Limited in distribution to 400 or fewer retail outlets in the US.

• Traditional Examples: Tiffany’s, Prada, Barney’s
• Customer: Age 25-45, Single, Net worth $500k+, Income

$150k+

The New Luxury

Unique ─ No Longer about the Brand Name. “Functional Luxury,” Quality, Authenticity, Craftsmanship.

• Customer: “HENRY” ─ High earner not rich yet, Income

$100-250k, Increasingly Millennials

• Examples: Apple, Whole Foods, Sleep Number, Rent the

Runway, Uber

ACHIE CHIEVAB ABLE LE LUXU UXURY Y RE RETAIL AIL FOR PRINCE GEORGE’S COUNTY

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No Hard and True Definitions Across All Retail Categories Fashion Examples Luxury

 Luxury/Designer: Gucci, Prada, Versace, Barney’s

High-End/Upscale

 Bridge: Ellen Tracy, DKNY  Better: Anne Klein, Jones New York, Armani

Moderate

 Contemporary: BCBG, J. Crew, Rebecca Taylor  Moderate: Gap, Nine West, Land’s End, Zara

Low End

 Discount/Off-Price: TJ Maxx, Nordstrom Rack  Budget/Mass Market: Target, Old Navy, Forever 21 County has this level

• f retailer

Could County get more of these? Likely Out

• f Reach in

Near Term

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Ret etailer ailer Pop

• pula

ulation ion Radius adius (Miles (Miles) Inc ncom

• me

Inc Income

• me

Metr Metric ic Other her Crit iter eria ia (C (Cot

• tenant

enants, s, Tr Traff affic, ic, Psychograp Psychographics) hics)

App Apparel Saks Off 5th 400,000 N/A $85,000 Average Loft/Chico's/White House Black Market 150,000 5 $75,000 Average

• J. Crew

200,000 10 $75,000 Average South Moon Under N/A N/A $100,000 N/A Cotenants: lululemon, Blue Mercury, Banana Republic Bevello 200,000 N/A $75,000 Average Sterling Jewelers 250,000 10 $75,000 Average Servi vices, s, Fitness, ss, Entertainme ment Cobb Theaters 100,000 5 $75,000 Average LA Fitness 60,000 3 $20,000 Per Capita Complete Nutrition 50,000 Trade Area $70,000 Average Hand & Stone Massage Spa 100,000 5 $60,000 Average Massage Heights 30,000 3 $80,000 Average Lifetime Fitness N/A 5 $70,000 Median Gro Groce cery ry Wegmans 50,000 3 $85,000 Average Publix 20,000 3 $50,000 Median Kroger 20,000 3 $40,000 Median Fresh Market 150,000 5 $75,000 Median Whole Foods 200,000 5 $75,000 Median Psychographics of "leading edge of food" in area; like sites near large universities; 50% college educated; Home Owner (60%+ Owner Occupied Homes) Sprouts Farmers Market 100,000 3 "above avg." N/A "High % white collar jobs"; 40% college educated Trader Joe's N/A 5 $64,000 N/A Median age of 44; 36,000 college educated in 5 mile; Home Owner (60%+ Owner Occupied Homes) Costco 200,000 5 $75,000 N/A Ho Home megoods s and Ou Outdoors s Go Goods Crate & Barrel N/A N/A $75,000 Average Pier 1 Imports 150,000 5 $60,000 Median Mattress Firm 100,000 5 $65,000 Average Dick's Sporting Goods N/A Trade Area $70,000 Average Cabela's 250,000 30 N/A N/A 75,000 cars per day (cpd) Performance Bicycle 700,000 10 $75,000 Average Res Restaurant -Qu Quick Servi vice La Madeleine 60,000 N/A $75,000 N/A Female-oriented retail; 50,000 cpd Pei Wei 250,000 5 $75,000 N/A Smashburger 50,000 3 $60,000 N/A 50,000 cpd CeFiore Italian Yogurt 45,000 1.5 $75,000 Average Rest estau aura rant nts s - Fu Full Ser ervi vice ces

• J. Alexanders

150,000 3 $60,000 N/A Wolfgang Puck Pizza Bistro 200,000 N/A $80,000 N/A "Recycled funky sites such as gas stations" World of Beer 75,000 N/A $80,000 N/A Cheesecake Factory 25,000 5 $75,000 Average Bloomingdale's, Nordstrom, Neiman Marcus Chuy's 50,000 5 $65,000 Average Dickey's BBQ Pit 30,000 N/A $60,000 Average Ted's Montana Grill 60,000 3 $100,000 N/A Urban properties Bonefish Grill 200,000 5 $100,000 Median Pay most attention to performance of surrounding restaurants - demographics aren't the whole story

Site Selection Criteria for Selected Retailers

LUXURY AND “HENRY” CONSUMERS LIVE IN DIFFERENT LOCATIONS TODAY

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Luxury Consumers (Top Tier Tapestry) “HENRY” Consumers (Laptops and Lattes, Trendsetters, Metro Renters) Capitol Hill, Georgetown, Shaw/U Street, Rosslyn- Ballston, Alexandria  Metro Accessible Chevy Chase, Bethesda, Fairfax, Annapolis, Howard County, Potomac

MARKET MARKETABIL ABILITY ITY OF TH OF THE E COU COUNTY NTY

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• Median Income
• Education Levels
• Population Density
• Employment Proximity
• Traffic Patterns

(Both Pedestrian and Vehicular)

• Surrounding Land Uses
• Co-tenants

Retailer Site Selection Criteria An Intersection of Location and Demographics

PO POPU PULA LATION TION DEN DENSITY SITY

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Most retailers looking for density of at least 50,000 in 3-mile radius (medium and dark green).

1,000 PSM = 28,000 in 3-mile radius 2,000 PSM = 55,000 in 3-mile radius 5,000 PSM = 140,000 in 3-mile radius

MEDIA MEDIAN N HO HOUS USEHOL EHOLD D IN INCO COME ME

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Most retailers looking for MHI above $75,000 (medium and dark green).

EDU EDUCA CATION TION LEV LEVELS ELS (% WITH (% WITH BACH CHEL ELOR ORS+) S+)

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Education levels cited as more important than income by Whole Foods, Trader Joe’s, other lifestyle retailers, but cut-off less well-defined.

OFFICE EMPL OFFICE EMPLOYMEN YMENT

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Marketability by Submarket

Southwest Retail Trade Area

Quantity of Retail is In Balance With The Market Size

QUAN

ANTITY TITY OF OF RET ETAIL AIL

• In Balance with Market Size
• Trade Area Is Not Over Retailed
• Low Population Density/High-income Residents
• Meets Current Level of Market Demand

QUAL

ALITY TY OF RET ETAIL AIL

• Varied Degrees of Quality
• Access to Higher End Retail

 (National Harbor, Alexandria and Charles County)

• Tenant quality is expected to improve with increasing density and

household incomes

NEIGHB

EIGHBOR ORHOO HOOD/C

/COMMUN

OMMUNITY TY RET ETAIL AIL CEN ENTE TERS RS

• Local-serving Retail
• Well Tenanted, Not At Risk of Failing
• Strongest Performers--Grocery-anchored Centers
• Grocery-anchored Centers in better physical repair than non-grocery

anchored centers

• Trade area lacks larger retail centers to complement community

retail and destination retail.

DES

ESTIN TINATION TION RET ETAIL AIL

• Higher-End Retail Locations
• National Harbor
• MGM Casino
• Tanger Outlets National Harbor

National Harbor Tanger Outlets

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Marketability by Submarket

Southeast Retail Trade Area

Quantity of Retail is In Balance With The Market Size

QUAN

ANTITY TITY OF OF RET ETAIL AIL

• In Balance with Market Size
• Retail demand/spending supports small amount of retail adequate

for the existing retail to succeed

• Trade Area Is Not Over Retailed
• Low Population Density/High-income Residents
• Meets Current Level of Market Demand
• Submarket probably could not support additional retail beyond a

neighborhood center (grocery anchored) in the near term.

• Cluster of retail immediately south in Charles County also

serves the southeast and southwest trade areas.

QUAL

ALITY TY OF RET ETAIL AIL

• Existing centers in healthy condition

Power Center

• Brandywine Center, is a strong performer that serves as the power

center of choice for much of the Southeast and Southwest submarkets

• This center is well tenanted. Costco, Marshall’s, Target, and

Safeway as well as smaller in-line stores provide an array of options for residents.

• Not At Risk of Failing. Should continue to perform well.

TR TRAD ADE E AR AREA EA OPPO PPORTUNITIE TUNITIES

North Trade Area Central and South Trade Areas (Outside Beltway) Central and South Trade Areas (Inside Beltway) Consumers Young and Urban Moderate spending power Concentration of office employment Upper middle class families Highest spending power Mix of demographics International/ethnic influence Lowest spending power Neighborhood Typology Walkable neighborhoods Higher-density housing Multimodal access Low density Single-family suburban neighborhoods Well served by highways and major road network Older single-family Large multifamily buildings/complexes High proximity to multimodal options but some areas have low walkability or connectivity to them Retail Opportunities Small-scale centers near households & transportation Household needs (grocery, drug, convenience) Mid-priced food and dining Entertainment venues Strongest opportunity for high-end national tenants Major retail centers (power, lifestyle, and regional) drawing from the whole county Serve niche populations with local or non-traditional tenants Identify service gaps for household needs Strategic Direction

• Existing, cheap space ripe for

independent businesses

• Renovate older buildings and main

streets

• Improve quality of tenanting at

existing retail centers

• Identify location/center most

suitable for higher-end retail

• Improve quality of tenants
• Address location and access issues

COUNTY RETAIL STRATEGIC ACTION PLAN AND MARKETING PLAN OBJECTIVES

Retail Strategic Action Plan

 Re-energize underutilized retail properties.  Create long lasting, high value places to support luxury retail over the long–term.  Focus resources and efforts to improve retail in a targeted direction–healthy, stable, troubled

properties.

 Coordinate land use policies (target growth areas) with retail marketability. The County is

pro-retail and has a new and improved development review and entitlement process.

 Transition strategies to action over the long-term.

Retail Marketing Plan

 Enhanced Marketing and Branding. Targeted one-on-one outreach. Conferences such as

International Council of Shopping Centers (ICSC), Urban Land Institute (ULI), National Retail Federation (NRF). Educational seminars.

 Create a compelling story. All stakeholders.(County officials, brokers, tenant representatives,

developers, other “champions.”) should be telling the same positive story.

 Highlight new retailers and retail developments. Share positive facts and figures.  Strong, underserved middle class.  Strategic places for retail exist and are getting stronger. Many potential redevelopment

targets.

 Explore Expand Experience.

COMPETE IN THE REGION FOR HIGHER QUALITY RETAIL

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For Further Information Contact:

Prince Prince George’s County Economic Development Corporation Larry Hentz, Director of Business Development lhentz@pgcedc.com (301) 583-4650 M-NCPPC NCPPC, , Prince Prince George’s County Planning Department Jacqueline Philson, Master Planner, Project Manager/Facilitator Countywide Planning Division Jacqueline.Philson@ppd.mncppc.org 301-952-3627 Michael Zamore, Acting Planning Supervisor Community Planning Division Michael.Zamore@ppd.mncppc.org 301-952-3253

Study Links:

Retail Market Analysis: http://www.pgplanning.org/Resources/Publications/Retail_Market_Analysis.htm Retail Marketability and Competitiveness Study: http://www.mncppcapps.org/planning/Publications/PDFs/311/Retail%20Marketability%20Analysis%20Deliverable.pdf High-End Retail Market Analysis: http://www.mncppcapps.org/planning/Publications/PDFs/312/High-End%20Retail%20Deliverable.pdf