RETAIL - Center City District
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RETAIL
Rikumo | Marisa Fischetti
Center City’s flourishing retail scene builds on more than two seeing higher vacancy – up to 12.4% at the end of 2018. But Center
decades of mixed-use development, with residential, convention City’s density, diversity and walkability has created significant
and tourism growth broadening the historic base of retail cus- opportunities for retailers who know how to capitalize on the
tomers provided by office tenants and educational and health demographic changes that are reshaping urban cores.
care institutions downtown. Today, 305,000 workers, 193,000
Globally, retailers are challenged by the need to find the
residents, 112,000 college students and 3.5 million occupied ho-
ideal mix between online and brick-and-mortar locations. Those
tel room nights combine to create more than $1 billion in retail
who achieve that balance, however, create unique environments
demand annually.
that bring shoppers into stores and create memorable experi-
Downtown Philadelphia’s increased purchasing power has ences. Although in-store retail sales are down in certain market
attracted more than 77 national retailers in the last five years. segments nationally, Center City is benefiting from a range of
These stores add to the mix of local boutiques and independents, categories and concepts experiencing the most growth. These
while creating both entry-level and higher-skilled jobs. They also include grocery, home and garden, wellness and beauty, food
solidify Center City’s status as a regional shopping destination. and beverage, value/outlet and online retailers opening brick-
and-mortar locations. In particular, Center City has experienced
While Center City is feeling the pressures that are affecting
strong growth in boutique fitness (+22), quick service restaurants
retailers nationwide, occupancy on the prime retail corridors
(+22), and click-to-brick tenants (+10) during the past five years.
of Walnut and Chestnut streets from Broad to 20th streets is a
healthy 94.6%, sustained by downtown’s desirable demographic The latest retailers to announce a Rittenhouse Row address
of millennials and affluent empty nesters and augmented by include Rumble Boxing, Red Wing, The Tie Bar, Brandy Melville,
visitors and students. By comparison, Reis Inc. reports retail Marine Layer, Shakespeare & Co., Scotch & Soda, and MM.La-
vacancy at 10.2% nationally, while Colliers International puts Fleur. Limited space and strong demand from brands seeking
regional vacancy at 9.2%. Shopping malls in the Philadelphia to enter the Center City market have led retailers to locate in
region, which once drew retail away from the downtown, are now burgeoning Center City East, particularly those seeking lower
32 CENTER CITY DISTRICT & CENTRAL PHILADELPHIA DEVELOPMENT CORPORATION | CENTERCITYPHILA.ORGRETAIL
rents and larger floor plates. Tenants including Polo Ralph noon, the area between Rittenhouse Square and Broad Street
Lauren, Forever 21, Levi’s, Guess, Asics, Ulta, T.J. Maxx, H&M, remains animated through the weekend and during evening
City Fitness, AMC Theaters, City Winery, Iron Hill Brewery, P.J. hours, underscoring its status as a destination for retail and
Clarke’s, Shake Shack, Federal Donuts and Little Baby’s Ice entertainment. New retailers have transformed the area around
Cream have helped revive Philadelphia’s historic department 16th and Chestnut streets from a less desirable location into
store corridor. There has also been an uptick in big-box retailers one where pedestrian counts have increased by 45% over 2013
signing leases in neighborhoods surrounding the core of the volumes. West Chestnut Street’s transformation, as well as the
downtown in larger developments recently completed or under increased growth underway on East Market Street, are power-
construction, including PetSmart, Sprout’s Farmers Market, ful indicators that destination retailers can locate anywhere in
Aldi, Giant Heirloom, and several Targets. Center City’s walkable downtown and shoppers will follow.
Demand is driving more than 1.4 million square feet of retail While new restaurants and dining districts continue to emerge
currently under construction with development surging east of in surrounding neighborhoods, Center City continues to be
Broad Street, with some of Philadelphia’s most ambitious retail the epicenter for the top restaurants in the country. The 468
and mixed-use projects. New developments on Market East rep- full-service restaurants between Vine and South streets, river
resent a $910 million investment that is creating a continuous to river, helped solidify Philadelphia’s No. 1 spot on Travel +
shopping and dining experience from Independence Mall to the Leisure magazine’s “East Coast Food Cities” list, ahead of both
major Center City convention hotels, just east of City Hall. New York City and Boston. Restaurants are also becoming an
important component of the merchandising mix of large-scale
Surging pedestrian volumes on major downtown streets are key
retail developments opening in Center City, reflecting how cus-
indicators of change. While most of Center City’s pedestrian
tomers want to spend their time and money.
traffic peaks during the week around lunchtime and late after-
Center City retail growth has been strongly supported by the
Philadelphia Retail Marketing Alliance, a collaboration of the
CCD, City of Philadelphia, PIDC, the Philadelphia Convention
RETAIL DEMAND FOR SHOPPERS’ GOODS, 2018 & Visitors Bureau, Visit Philadelphia, and major downtown
retail brokers. This business attraction initiative includes direct
JOB MARKET CORE CENTER CITY GREATER CENTER CITY outreach to brokers and store representatives, detailed data and
Office Workers 146,400 158,300 research on market trends, advertising, story placements in
Other Workers 114,000 147,200 trade publications to elevate Philadelphia’s retail profile and a
Total Workers 260,400 305,500
highly promoted, online presence (www.philadelphiaretail.com)
that positions Center City as an attractive retail location.
RESIDENTIAL POPULATION MARKET
Owner Occupied Housing 24,075 84,832
Renter Occupied Housing 39,122 102,102
Population in other living
3,575 6,254
arragements
Population (2018) 66,773 193,187 CENTER CITY RETAILER TYPE, 2018
VISITOR MARKET
Hotel Rooms 12,283 743 BOUTIQUE/
INDEPENDENT/LOCAL
Overnight Visitors 3,530,000 RETAILERS
DOLLARS OF DEMAND FOR
SHOPPERS' GOODS 243 NATIONAL RETAILERS
743
Office Workers $155,769,600 $168,431,200
Other Workers $60,306,000 $77,868,800
Residents $128,204,160 $370,919,040
LOCAL RETAILERS
Overnight Visitors $473,020,000 $473,020,000
TOTAL $817,299,760 $1,090,239,040
* Dollars of demand for each market segment are CCD calculations based on retail industry standards.
U.S. Census Bureau, Local-Employment Household Dynamics;
Bureau of Labor Statistics, Current Employment Statistics;
U.S. Census Bureau, American Community Survey, 2013-2017, CCD Population Estimates;
Philadelphia Convention & Visitors Bureau Source: Retail Survey 2018, Center City District
CENTER CITY DISTRICT & CENTRAL PHILADELPHIA DEVELOPMENT CORPORATION | CENTERCITYPHILA.ORG 33RETAIL
AVERAGE DAILY PEDESTRIAN ACTIVITY BY SEASON, DECEMBER 2017 – NOVEMBER 2018
PEDESTRIANS WINTER* SPRING SUMMER FALL
30,000
25,000
20,000
15,000
10,000
5,000
17,401
19,959
19,540
19,693
21,691
21,920
22,757
23,210
27,789
29,683
28,406
24,412
13,255
14,824
16,379
16,644
13,042
14,824
16,379
16,644
18,936
21,487
22,774
23,399
13,290
13,523
16,657
13,528
11,918
13,944
15,749
14,930
0
1700 BLOCK INTERSECTION OF INTERSECTION OF INTERSECTION OF 1200 BLOCK 1200 BLOCK 1100 BLOCK 800 BLOCK
OF WALNUT 17TH & CHESTNUT 16TH & CHESTNUT 13TH & SANSOM OF WALNUT OF MARKET OF CHESTNUT OF MARKET
Source: Motionloft Pedestrian Counts; Center City District
*Note: Winter includes December 2017, January 2018 and February 2018
PEDESTRIAN VOLUMES ON PRIME RETAIL STREETS
HAVE INCREASED 30% TO 40% SINCE THE CITY'S
ECONOMY HAS COME OUT OF RECESSION
AVERAGE DAILY PEDESTRIAN ACTIVITY BY WEEKDAY/WEEKEND, 2018
PEDESTRIANS WEEKDAY WEEKEND
35,000
30,000
25,000
20,000
15,000
10,000
5,000
19,052
19,246
23,105
20,376
30,025
22,483
15,146
15,199
13,857
13,348
23,220
17,228
15,352
11,758
15,324
10,965
0
1700 BLOCK INTERSECTION OF INTERSECTION OF INTERSECTION OF 1200 BLOCK 1200 BLOCK 1100 BLOCK 800 BLOCK
OF WALNUT 17TH & CHESTNUT 16TH & CHESTNUT 13TH & SANSOM OF WALNUT OF MARKET OF CHESTNUT OF MARKET
Source: Motionloft Pedestrian Counts, Center City District
34 CENTER CITY DISTRICT & CENTRAL PHILADELPHIA DEVELOPMENT CORPORATION | CENTERCITYPHILA.ORGBROAD ST
VINE ST
MARKET ST City Hall
SOUTH ST
OUTDOOR SEATING LOCATIONS
CHAIRS: 10 or Less 11–25 26–50 51–100 More than 100
CAFÉ PLAZA RETAIL/SERVICE PARK
Source: Outdoor Seating Survey 2018, Center City District
433 OUTDOOR SEATING LOCATIONS
AVERAGE HOURLY PEDESTRIAN ACTIVITY BY TIME OF DAY, 2018
INTERSECTION OF INTERSECTION OF INTERSECTION OF 800 BLOCK 1700 BLOCK 1200 BLOCK 1100 BLOCK 1200 BLOCK
16TH & CHESTNUT 17TH & CHESTNUT 13TH & SANSOM OF MARKET OF WALNUT OF MARKET OF CHESTNUT OF WALNUT
3,000
2,500
2,000
1,500
1,000
500
0
EARLY MORNING LATE LUNCHTIME LATE EVENING EVENING LATE
MORNING RUSH HOUR MORNING (11AM-2PM) AFTERNOON RUSH HOUR (7PM-11PM) NIGHT
(4AM-6AM) (6AM-9AM) (9AM-11AM) (2PM-4PM) (4PM-7PM) (11PM-4AM)
Source: Motionloft Pedestrian Counts, Center City District
CENTER CITY DISTRICT & CENTRAL PHILADELPHIA DEVELOPMENT CORPORATION | CENTERCITYPHILA.ORG 35RETAIL
CENTER CITY STOREFRONTS, 2018 CENTER CITY RETAILERS, 2018
209 APPAREL
986 RETAILERS
167 JEWELRY/WATCHES
146 FOOD OR DRINK
1,005 FOOD ESTABLISHMENTS
111 HOME/GARDEN
3,195 986
1,204 SERVICE PROVIDERS 72 BEAUTY/HEALTH/FITNESS
ART/COLLECTIBLES/
65 HOBBIES
STOREFRONTS RETAILERS
35 ELECTRONICS
29 AUTOMOTIVE
26 OPTICAL
18 MUSIC/VIDEO/VIDEO GAMES
17 BOOK STORE
Source: Retail Survey, Center City District
13 GENERAL MERCHANDISE STORE
Source: Retail Survey, Center City District
12 OFFICE SUPPLIES & STATIONERY
11 PET
55 OTHER
WHILE NATIONAL BRANDS HAVE A VERY HIGH PROFILE,
75% OF CENTER CITY RETAILERS ARE BOUTIQUES,
INDEPENDENT OR LOCAL ESTABLISHMENTS
CENTER CITY FOOD ESTABLISHMENTS, 2018 CENTER CITY SERVICE PROVIDERS, 2018
244 BEAUTY
468 FULL-SERVICE RESTAURANTS
171 HEALTH
TAKEOUT/SANDWICH/
332 QUICKSERVICE RESTAURANTS 106 BANK/FINANCIAL
89 103 REAL ESTATE
1,005
COFFEE SHOPS
45
31
BARS/NIGHTLIFE
ESTABLISHMENTS
ICE CREAM/WATER ICE/ FOOD
100
74
LEGAL
LAUNDRY 1,204
SERVICE PROVIDERS
FROZEN YOGURT ESTABLISHMENTS 69 FITNESS
29 BAKERIES
36 HOME
11 ALL OTHERS
29 INSURANCE
21 CHILD CARE
21 PROFESSIONAL
Source: Retail Survey, Center City District 19 ACCOUNTING Source: Retail Survey, Center City District
17 PET
16 SOCIAL SERVICES
15 TRAVEL
163 OTHER
36 CENTER CITY DISTRICT & CENTRAL PHILADELPHIA DEVELOPMENT CORPORATION | CENTERCITYPHILA.ORG47,000 SF
25,430 SF
22,000 SF 7,000 SF 2,965 SF
8,450 SF 36,000 SF
VINE ST
26,916 SF
RACE ST
SCHUYLKILL RIVER
DELAWARE RIVER
CHERRY ST
38,000 SF
12,000 SF
ARCH ST
OUTLET
JFK BLVD
CHRISTOPHER COLUMBUS BLVD
MARKET ST City Hall MARKET ST
I-95
CHESTNUT ST
SANSOM ST
2,500 SF
WALNUT ST
LOCUST ST 2,835 SF
SPRUCE ST
456 SF
11,000 SF
1,600 SF
PINE ST
LOMBARD ST
2,200 SF 900 SF 3,040 SF 12,000 SF 4,500 SF 3,600 SF
6,000 SF 2,800 SF
SOUTH ST
9,500 SF
15,000 SF
32,000 SF 36,000 SF
13TH ST
21ST ST
12TH ST
11TH ST
10TH ST
9TH ST
8TH ST
7TH ST
6TH ST
5TH ST
4TH ST
3RD ST
2ND ST
JUNIPER ST
23RD ST
FRONT ST
18TH ST
17TH ST
16TH ST
15TH ST
27TH ST
26TH ST
25TH ST
24TH ST
BROAD ST
22ND ST
20TH ST
19TH ST
SELECTED NEW CENTER CITY RETAILERS IN 2018 Source: Center City District
PRIME RETAIL RENTS, 2018
AVERAGE RENT PER SF
$150
NATIONAL BRANDS CAPITALIZE
$120
ON THE GROWING VITALITY OF
$90
CENTER CITY, ATTRACT THEIR
PEERS AND PROVIDE THE
$60
SECURITY TO HELP FINANCE
$30
MAJOR DEVELOPMENTS
$0
$125 $80 $65 $45
WEST WALNUT ST WEST CHESTNUT ST WEST MARKET ST OLD CITY
Source: Cushman & Wakefield
CENTER CITY DISTRICT & CENTRAL PHILADELPHIA DEVELOPMENT CORPORATION | CENTERCITYPHILA.ORG 37You can also read
