Center City Reports: Retail

Center City Retailer Type

Source: Retail Survey, Center City District

With 180,000 residents, 300,000 workers, 121,000 college students in or immediately adjacent to downtown and 3,000,000 annually occupied hotel room nights, Center City has become an attractive location for both high-end and fast-fashion retailers who value Center City’s highly concentrated, cosmopolitan and diverse customer base.

A NATIONAL RETAIL DESTINATIONBuilding upon a highly diversified mix of local proprietors, several large-scale national retailers have opened stores

in Center City this fall, just in time for the holiday shopping season. These include a 100,000-square-foot Century 21, a 39,000-square-foot Nordstrom Rack, and a 29,000-square-foot Uniqlo. All three opened to large crowds and fanfare, as shoppers waited in long lines to be among the first Philadelphians to purchase their merchandise. Other retailers opening in 2014 included Vince, Timberland, Vans, Calypso St. Barth, My.Suit, American Eagle Outfitters and Goorin Brothers, with Michael Kors and Forever 21 slated to open soon.

23%

77%

NationalRetailers

Boutique, Independent,or Local Retailers

Center City Reports:Retail

December 2014www.CenterCityPhila.org

A publication of the Central Philadelphia

Development Corporationand the Center City District

660 Chestnut Street Philadelphia, PA 19106

215.440.5500

2 Center City District & Central Philadelphia Development Corporation www.CenterCityPhila.org

Retail

Source: Philadelphia Retail Marketing Alliance

As space on Walnut Street becomes scarce and rents increase, both national retailers and local boutiques are expanding onto adjacent streets, broadening Philadelphia’s prime retail district and increasing property values. Both Uniqlo and Nordstrom Rack chose to open on West Chestnut Street, while Century 21 kicked off the transformation of The Gallery on Market East. Philadelphia’s Century 21 is the first outside the New York region for the retailer, while Uniqlo’s new Chestnut Street store is their first free-standing flagship outside of New York City. Both highlight Center City’s growing importance as a retail destination nationally.

DEMAND DRIVES RETAIL DEVELOPMENTMarket East is finally poised for total transformation, as former department stores are repurposed. The former Strawbridge’s department store re-opened in October with Century 21 anchoring what will become PREIT and Macerich’s total re-imagination of the 1.4 million-square-foot mall called The Gallery. Across the street, on the 1100 block of Market, National Real Estate Development has begun demolition of the remaining two floors of the former Snellenberg’s, replacing it with a $250 million project that will add 322 residential units, office space

and 140,000 square feet of retail. A block south on Chestnut Street, Brickstone Realty is investing $75 million in a mixed-use project that will include 112 apartments and 95,000 square feet of retail.

Meanwhile, west of Broad, two projects will add 90,000 square feet of retail as developers try to capitalize on rising rents on Walnut Street.1 New York-based Midwood Investment & Development is constructing a 60,000-square-foot glass structure that will include Cheesecake Factory as an anchor. The other project, by PREIT, will add 30,000 square feet on the city’s busiest walkway.

City Hall

INDEPENDENCE NATIONALHISTORICAL PARK

WASHINGTONSQUARE

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2,500 sf

10,000 sf (Rebranding)

39,000 sf

29,000 sf

5,000 sf

8,000 sf

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2,338 sf (relocation)


873 sf

100,000 sf

3,740 sf

2,270 sf

5,800 sf

2,000 sf 4,365 sf

1,500 sf

18,000 sf


The Children’s Boutique

6,624 sf

Selected New Center City Retailers in 2014

3Center City District & Central Philadelphia Development Corporation www.CenterCityPhila.org

Retail

Source: OnTheMap - 2011, Local Employment Dynamics Partnership, U.S. Census Bureau

Worker Age Earnings

Retail Area Workers 29 or Younger 30-54 55 or Older $1,250/mo

or Less $1,251-$3,333/mo More than $3,333 per Month

Center City 251,498 52,511 149,420 49,567 30,239 70,028 151,231

King of Prussia Mall 28,400 8,290 15,293 4,817 5,500 6,962 15,938

Cherry Hill Mall 14,222 4,349 7,121 2,752 4,232 4,436 5,554

Workers Within a One-Mile Radius

Retail Demand for Shoppers’ Goods 2012

Radius from City Hall

5-Minute Walk(1/4 Mile)

15-Minute Walk (1/2 Mile)

30-Minute Walk (1 Mile)

Job Market

Office, Education, & Health-care Workers 55,781 120,976 178,344

Other Workers 45,643 53,672 73,154

Total Workers 101,424 174,648 251,498

Residential Market

Owners 3,711 11,267 38,329

Renters 11,998 26,298 64,267

Population 15,709 37,565 102,596

Visitor Market

Hotel Rooms 5,034 8,921 10,257

Overnight Visitors 1,346,822 2,386,769 2,744,209

Dollars of Demand for Shoppers' Goods

Office Workers $59,350,984 $128,718,464 $189,758,016

Other Workers $24,145,147 $28,392,488 $38,698,466

Residents $30,161,280 $72,124,800 $196,984,320

Overnight Visitors $180,474,085 $319,827,039 $367,724,015

Total $294,131,496 $549,062,791 $793,164,817

Job Market Source: OnTheMap - 2011, Local Employment Dynamics Partnership, U.S. Census BureauResidential Market Source: American Community Survey 2007-2011 5-year Estimates, U.S. Census BureauVisitor Market Source: Visit Philadelphia

Dollars of demand for each market segment are CCD calculations based on retail industry standards.

DEMAND DRIVERS: MILLENNIALS, YOUNG FAMILIES, OFFICE WORKERS & VISITORSGrowing demand for retail is driven in part by steady residential growth in Center City. Since 2000, the population between Tasker Street and Girard Avenue, river to river, has increased 13%, to 180,000, as well-educated workers choose to live close to downtown and university employers and take advantage of the broad array of cultural, entertainment and dining options. Millennials, entering their peak consumer-spending years,2 represent more than 29% of the downtown’s population. With household incomes averaging more than $107,000 and 75% of residents holding at least a bachelor’s degree, Center City’s purchasing power is increasing.

Residential growth and purchasing power has also been driven by an increase in the number of young families choosing to live downtown. Since 2000, more than 26,500 children were born to Center City parents and the 2010 Census documented a 42% increase in the number of children under the age of five.

Core Center City Greater Center City City of Philadelphia Philadelphia MSA

2013 Population 61,896 178,316 1,526,006 5,965,343

2013 Households 37,184 92,356 579,287 2,227,894

Source: Center City District Estimate Based on U.S. Census Bureau Data

Age

Under 5 Years 2.7% 5.1% 6.7% 6.2%

5 - 9 Years 1.1% 2.9% 6.0% 6.3%

10 - 14 Years 0.9% 2.4% 6.0% 6.5%

15 - 19 Years 3.2% 4.0% 7.6% 7.2%

20 - 24 Years 9.6% 10.3% 9.4% 7.0%

25 - 34 Years 35.5% 29.1% 16.3% 13.0%

35 - 44 Years 12.0% 13.1% 12.4% 13.2%

45 - 54 Years 9.0% 10.2% 12.9% 15.2%

55 - 64 Years 11.3% 10.3% 10.6% 11.9%

65+ Years 14.6% 12.6% 12.2% 13.4%

Source: 2008-2012 American Community Survey 5-year Estimates, U.S. Census Bureau

Income

Aggregate Income (in 2014 Dollars) $3,556,554,180 $7,118,620,380 $32,146,107,200 $187,222,579,600

Average Household Income (in 2014 Dollars) $107,510 $85,873 $55,376 $87,218

Below $35,000 30.4% 36.5% 47.9% 29.4%

$35,000 - $49,999 10.7% 11.3% 13.6% 11.9%

$50,000 - $74,999 14.8% 15.8% 16.2% 17.0%

$75,000 - $99,999 10.7% 10.3% 9.3% 12.8%

$100,000 - $149,999 14.0% 12.1% 8.0% 15.7%

$150,000 - $199,999 7.2% 5.9% 2.7% 6.8%

Above $200,000 12.1% 8.1% 2.3% 6.5%


Highest Educational Attainment (Age 25+)

High School Graduate or Less 14.1% 28.7% 54.2% 42.5%

Some College or Associate's Degree 10.6% 15.0% 22.6% 24.4%

Bachelor's Degree 32.1% 26.8% 13.4% 20.0%

Graduate/ Professional Degree 43.2% 29.5% 9.8% 13.1%


Retail Fact Sheet


Retail

Center City Retailers, 2014Center City Retailers, 2014

Jewelry & Watches 157

Food or Drink 133Home & Garden 122

Beauty, Health, & Fitness 47

Electronics 42

Pharmacy 37Books & Maps 26

Optical 28

Music, Video, & Video Games 23

All Others 99

Apparel 250

Art, Collectibles, & Hobbies 116


Total:1,080

Center City Food Establishments, 2014Center City Food Establishments, 2014

Full-Service Restaurants 444Takeout, Sandwich, & QuickService Establishments 309

Coffee Shops 91

All Others 8Bars & Nightlife Establishments 39

Bakeries 46

Ice Cream, Water Ice, & Frozen Yogurt Establishments 27


Note: Bars & Nightlife Establishments represent only those retailers who exclusively operate bars or clubs. Bars that primarily offer food are counted among Full-Service Restaurants and Takeout, Sandwich, & Quick Service Establishments.

Total:964

Downtown Philadelphia is home to 288,493 wage and salary workers, who generated at least $13 billion in payroll in 2011, as well as an expanding cohort of independent workers and start-up businesses. This dense concentration of employment (203 jobs per acre in the downtown core versus 0.6 in the surrounding suburbs) is made possible by a multi-modal transit system that brings 305,000 passengers downtown each day. The number of workers within a walkable one-mile radius of City Hall is 18 times higher than the number of workers within a one-mile radius of Cherry Hill Mall and nine times greater than the number of workers surrounding King of Prussia Mall. Sixty percent of the workers within a mile of City Hall earn more than $3,333 in monthly wages, compared to 56% surrounding King of Prussia Mall and 39% around the Cherry Hill Mall.

With 1.05 million convention attendees in 20133 and 3 million occupied hotel room nights,4 Center City Philadelphia overnight visitors augment residential and employee retail demand in the downtown. In 2012, almost 600,000 visitors to the region were from outside the United States, with more than15% coming from China, India, South Korea, and Japan. With tourists increasingly viewing Philadelphia as a travel destination of choice, retail demand generated by visitors will continue to grow.

The combined impact of affluent residents, high-wage office and healthcare workers, and visitors with substantial disposable income, augment citywide customers and college students, generating more than $793 million in retail demand within a 30-minute walk of City Hall. Approximately 46% of this is driven

Center City Service Providers, 2014

Center City Service Providers, 2014

Real Estate 141

Bank/Financial 101

Health 140

Legal 87

Fitness 58

Insurance 19

Art, Collectibles, or Hobbies 24

All Others 267

Beauty 237

Laundry 75

Accounting 18

Childcare 22

Shoe Shine & Repair 14

Travel 17Photo 15


Total:1,235


Retail

by overnight visitors, 24% by office workers, and 25% by residents within this area.

DIVERSE RETAIL MIXCenter City’s retail mix is more diverse than ever, including 250 apparel stores, 133 food and drink retailers, and 122 home and garden establishments. One of the top dining destinations in the country, Center City’s 964 food establishments consisted of 444 full-service restaurants and 309 takeout establishments. With 369 outdoor cafés animating sidewalks, Center City continues to see an increase in street vibrancy and activity.5

Center City’s large daily workforce and increasing residential population have also attracted a variety of service providers catering to their needs. But with the recent increase in young families with children, there is a distinct opportunity for children’s

retailers and child-oriented service providers to meet growing demand for children’s merchandise.

RETAIL DRIVES TRAFFICWith the second largest downtown population in the country,6 Center City is dense, diverse and thriving. This 24-hour downtown fosters a strong live-work environment, with more than 40% of residents living between Tasker Street and Girard Avenue working within these boundaries, and with another 12% working in adjacent University City. Center City’s walkability, multi-modal transit and expanding bike lanes, enable 62% of its residents to commute to work without using a car.

Workers, visitors, and residents generate significant foot traffic on Center City retail streets. While most of Center City’s pedestrian traffic peaks during the week around lunchtime and late afternoon, the area between Rittenhouse Square and Broad Street

remains animated throughout the weekend and during evening hours. An average of 33,000 daily pedestrians walked the 1700 block of Walnut on Saturdays in the spring.

In October 2014, average daily pedestrian counts on the 1600 block of Chestnut were up 48% over the same month the year before. While pedestrian counts throughout the downtown increased 17% during that same period, the opening of Uniqlo and Nordstrom Rack on that section of Chestnut helped drive even more traffic to that location. As Nordstrom Rack and Uniqlo prove, destination retailers can locate anywhere in Center City’s walkable downtown and shoppers will follow.

With more than $4.7 billion in development projects7 and residential population increasing, Center City’s retail footprint continues expanding as demand and rents rise.

Marcus Derricotte

In 2014, outdoor cafés (left), increased 13% in Center City over the year before. The interior of Century 21 (right) took over the old Strawbridge’s on Market East and reused many of the department store’s fixtures within the new space.


Retail

2014 Year-To-Date Pedestrian Activity by Season (December 2013 - October 2014)2014 Year-TO-Date Pedestrian Activity by Season (December 2013 - October 2014)

Intersection of 12th & Market

1700 Block of Walnut 1600 Block of Chestnut 1500 Block of Chestnut 1100 Block of Chestnut 800 Block of Market1200 Block of Walnut

Aver

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Source: Springboard Pedestrian Counts, Center City District

Spring SummerWinter* Fall

0

5,000

10,000

15,000

20,000

25,000

30,000

9,77

7

23,9

40

21,3

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22,8

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21,0

16

20,4

66

22,3

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13,5

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8,26

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4,41

9

17,4

77

16,7

23 19,4

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10,0

60

8,60

124

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23,5

67

23,7

78

18,2

38

23,3

94

20,7

34

22,0

28

14,3

18 16,8

39

16,8

44

16,8

50

City Hall

INDEPENDENCE NATIONALHISTORICAL PARK

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Camera Locations for 24-Hour Pedestrian Counts

The Center City District has installed 14 cameras throughout Center City that provide 24-hour pedestrian counts, 365 days each year.


Retail

Average Hourly Pedestrian Activity by Time of Day (December 2013 - October 2014)

Average Daily Pedestrian Activity by Weekday/Weekend (December 2013 - October 2014)

About this report: This report was researched by Casandra Dominguez, Manager of Business Retention and Retail attraction, with research assistance from Rick Way; designed by Abigail Saggi; and edited by Linda Harris, Director of Communications & Publications. The data from this report was drawn from Center City District’s annual Retail Survey, the U.S. Census Bureau, Visit Philadelphia and Springboard.

Average Hourly Pedestrian Activity by Time of Day (December 2013 - October 2014)

Early Morning

Morning Rush Hour

Late Morning

Late Afternoon

Evening Rush Hour

Evening Late NightLunch

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Source: Springboard Pedestrian Counts, Center City District

1700 Block of Walnut

1100 Block of Chestnut

800 Block of Market





0

500

1,000

1,500

2,000Time of Day Key:- Early Morning: 4am-6am- Morning Rush Hour: 6am-9am- Late Morning: 9am-11am- Lunch: 11am-2pm- Late Afternoon: 2pm-4pm- Evening Rush Hour: 4pm-7pm- Evening: 7pm-11pm- Late Night: 11pm-4am

Average Daily Pedestrian Activity by Weekday/Weekend (December 2013 - October 2014)

Aver

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17,881

21,60520,473

16,916

20,923

14,58014,924 15,375

20,594

6,493

8,994

13,175

16,667

0

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10,000

15,000

20,000

25,000

30,000






800 Block of Market


Weekday

Weekend

1. According to Colliers’ Global Retail Highlights, Q3 2013 report, Walnut had the fastest growing retail rents in the country, with a 33.8% increase over the year before.

2. In its report, “Millennials: Coming of Age in Retail,” Goldman Sachs estimates Millennial spending in apparel will increase by 20%-25% in the next five years.

3. Philadelphia Convention & Visitors Bureau

4. Visit Philadelphia

5. A Center City District Report, “Outdoor Sidewalk Seating in Center City,” documented a 13% increase in the number of outdoor cafés in 2014 over the year before.

6. The International Downtown Association and Center City District’s report, “Defining Downtown,” found that with 107,853 residents within half a mile of the downtown, Center City has the second largest downtown population nationally, behind only Manhattan.

7. Center City District’s “Center City Philadelphia Developments 2013-2017” found that $4.7 billion in major development projects were completed, under construction or in the pipeline between South and Spring Garden Streets as of Q1 2014.


Retail

Documents

Center City Reports: Retail