By Steve Levy
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About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved ... (More)
About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved downtown in 2006 and enjoy being able to walk to activities. I do not drive and being downtown where I work and close to the CalTrain station and downtown amenities makes my life more independent. I have worked all my life as an economist focusing on the California economy. My work centers around two main activities. The first is helping regional planning agencies such as ABAG understand their long-term growth outlook. I do this for several regional planning agencies in northern, southern and central coast California. My other main activity is studying workforce trends and policy implications both as a professional and as a volunteer member of the NOVA (Silicon Valley) and state workforce boards. The title of the blog is Invest and Innovate and that is what I believe is the imperative for our local area, region, state and nation. That includes investing in people, in infrastructure and in making our communities great places to live and work. I served on the recent Palo Alto Infrastructure Commission. I also believe that our local and state economy benefits from being a welcoming community, which mostly we are a leader in, for people of all religions, sexual preferences and places of birth. (Hide)
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Retail's Real Estate Glut is Growing
Uploaded: Apr 21, 2018
That is the headline in a Business Week article this week.
Last year 105 million square feet of retail space was announced for closure and this year so far the total is 77 million square feet in just the first three months.
Readers are familiar with some of the names of famous stores--Toys R Us, Sam's Club, j Crew and a host of others including some Sears and Macys stores locally
We see it in the region as well with the closure of the Vallco Mall and repurposing under way to include housing and a smaller more diversified retail mix,. The same is true in the Hilltop Mall in Richmond.
Business week reports that the U.S has 24 square feet of retail space per person, several times more than in most developing countries.
Stanford Shopping Center seems to be doing well based on strong tourist sales but is also changing its mix as the new Tesla store indicates.
And when I walk downtown I see space that has stayed vacant for a long time and to my eye more vacancies than since the strong job growth began.
If it were just high rents, that would not explain the widespread store closings in areas where rents are not high and the downsizing and move to online of chains here and across the country.
If it were just parking availability that would not explain empty mall space around the country where parking is ample including Vallco and Hilltop.
A long term trend seems to be emerging where online sales growth far outpaces store sales growth though it is still not a large share of retail--but compound growth over 10% a year will move the online % up steadily.
And with store closings and excess space, owners may seek non retail uses including housing that provide a better return.
It will be interesting to see how this plays out in Palo Alto and surrounding communities.
What is it worth to you?
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