A Simulation Analysis Of The Relationship Between Retail Sales And Shopping Center Rents

Topics:
Property Analysis
Tags:
Analysis,
Sales,
Sales Force Management,
Sales Strategy
Source:
California State University, Fullerton - College of Business and Economics

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Overview: This article examines the variation in rents per square foot among regional shopping centers in the United States in response to variation in retail sales per square foot. The analysis breaks new ground by treating base and percentage rents as endogenous functions of retail sales. The analysis further distinguishes between de facto, if not de jure, fixed and percentage leases, and between new versus existing leases. Simulation results suggest that shopping center rents can easily increase in the short-run as retail sales decrease, or they can easily decrease as retail sales increase. In addition, the results suggest that shopping center rents per square foot generally react more aggressively to an increase in retail sales per square foot over time than to a decrease in retail sales per square foot, all else equal.

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Format: PDF | Size: 113KB | Date: Jan 2001 | Pages: 24


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