Don Haddix
03-01-2009, 03:26 PM
As you may or may not know we have the annual retreat at City Hall for budget and other discussions. It will be on March 6 and 7.
Here (http://www.peachtree-city.org/index.asp?nid=193) is a link to the retreat packet.
There is some interesting and informative date near the end of the packet about residential, commercial and industrial property occupancy.
To illustrate my point on why interesting, an example is commercial occupancy, that has been used to justify we need more retail because our vacancy rate is so low. It shows Wilksmoor as having an 8.45% vacancy rate.
Sounds good, right? Drive through and look at the For Lease signs. You will ask yourself how that can be right?
It is right if you ONLY look at sq' with no other considerations taken in as well.
Count the store fronts. More like upwards to 25% vacancy. So when someone is looking to buy in PTC what are they going to see and take into account for their impressions? Footage or fronts? Fronts.
Now, look at the financial impact on PTC, or any city. Which have the most positive sales tax over costs? Those small, low footage stores.
In fact, many cities are tearing down the malls, Big Boxes and such are replacing them with small stores. The result is less crime, traffic and more net income. Some are even turning them into green space and still gaining on net income and safety.
Even further, a number of the old Big Box builders are moving away from planning such stores. They are going under 32,000 sq '.
Consider, you have a shopping area with, say, 100,000 sq' of total space. 80,000 is one store and it has 4-5,000 sq' small stores with it. See how the % by sq' changes depending on the combination of which stores are occupied.
Big Box = b
b + 3 = 95%
b + 2 = 90%
b + 1 = 85%
b + 0 = 90%
0 + 4 = 20%
Which looks the worst visually? Even with all 4 stores open that Dark Box makes it look blighted.
Now, look at the same 100,000 sq' with all 5,000 sq' stores. Even with 4 stores closed, meaning only 80% occupancy, the visual impact is far less negative while the economic impact would remain positive.
As well the PTC retail has more stores than disposal income available. That means they are struggling to capture a limited market share that they may not be able to accomplish or not capture enough to make a decent profit.
That reality is very apparent with the continued store closings we are experiencing.
The best financial impact on the city is with the small stores. Plus not being regional stores, the crime and traffic impacts are far less as well, which do reduce the financial impact on the city as regards infrastructure and service costs.
Just trying to show how the old way of looking at commercial occupancy is not the best way to look at occupancy. There are so many realities it does not account for.
Georgia Tech and other universities and research sources do not look at just sq'. They have done the numbers and see that retail size must be a major component in interpreting data. Anything over 32,000 sq' for a single store or 150,000 sq' on the total development is regional, not local, shopping, which carries very different considerations and impact upon a city.
As for homes, those are MLS numbers. They do not account for homes For Sale By Owner or by any real estate agencies not on the MLS. Nor do they account for homes off the market because they are not selling.
Bottom line is the housing market is severely depressed.
Key to our future are jobs first. That means focusing on infrastructure and services that promote attracting good pay jobs where the workers can afford to live in PTC, which is not a reality with just building more retail.
Here (http://www.peachtree-city.org/index.asp?nid=193) is a link to the retreat packet.
There is some interesting and informative date near the end of the packet about residential, commercial and industrial property occupancy.
To illustrate my point on why interesting, an example is commercial occupancy, that has been used to justify we need more retail because our vacancy rate is so low. It shows Wilksmoor as having an 8.45% vacancy rate.
Sounds good, right? Drive through and look at the For Lease signs. You will ask yourself how that can be right?
It is right if you ONLY look at sq' with no other considerations taken in as well.
Count the store fronts. More like upwards to 25% vacancy. So when someone is looking to buy in PTC what are they going to see and take into account for their impressions? Footage or fronts? Fronts.
Now, look at the financial impact on PTC, or any city. Which have the most positive sales tax over costs? Those small, low footage stores.
In fact, many cities are tearing down the malls, Big Boxes and such are replacing them with small stores. The result is less crime, traffic and more net income. Some are even turning them into green space and still gaining on net income and safety.
Even further, a number of the old Big Box builders are moving away from planning such stores. They are going under 32,000 sq '.
Consider, you have a shopping area with, say, 100,000 sq' of total space. 80,000 is one store and it has 4-5,000 sq' small stores with it. See how the % by sq' changes depending on the combination of which stores are occupied.
Big Box = b
b + 3 = 95%
b + 2 = 90%
b + 1 = 85%
b + 0 = 90%
0 + 4 = 20%
Which looks the worst visually? Even with all 4 stores open that Dark Box makes it look blighted.
Now, look at the same 100,000 sq' with all 5,000 sq' stores. Even with 4 stores closed, meaning only 80% occupancy, the visual impact is far less negative while the economic impact would remain positive.
As well the PTC retail has more stores than disposal income available. That means they are struggling to capture a limited market share that they may not be able to accomplish or not capture enough to make a decent profit.
That reality is very apparent with the continued store closings we are experiencing.
The best financial impact on the city is with the small stores. Plus not being regional stores, the crime and traffic impacts are far less as well, which do reduce the financial impact on the city as regards infrastructure and service costs.
Just trying to show how the old way of looking at commercial occupancy is not the best way to look at occupancy. There are so many realities it does not account for.
Georgia Tech and other universities and research sources do not look at just sq'. They have done the numbers and see that retail size must be a major component in interpreting data. Anything over 32,000 sq' for a single store or 150,000 sq' on the total development is regional, not local, shopping, which carries very different considerations and impact upon a city.
As for homes, those are MLS numbers. They do not account for homes For Sale By Owner or by any real estate agencies not on the MLS. Nor do they account for homes off the market because they are not selling.
Bottom line is the housing market is severely depressed.
Key to our future are jobs first. That means focusing on infrastructure and services that promote attracting good pay jobs where the workers can afford to live in PTC, which is not a reality with just building more retail.