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Store Location in Shopping Centers: Theory & Estimates

Author

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  • Charles C. Carter

    (Marylhurst University, Center for Professional Real Estate Studies, 17600 Pacific Highway, P.O. Box 260, Marylhurst, Oregon 97036)

  • Kerry D. Vandell

    (Department of Real Estate & Urban Land Economics, University of Wisconsin-Madison, Madison, Wisconsin 53706)

Abstract

This paper develops a formal theory of store location within shopping centers based on bid rent theory. The bid rent model is fully speci?ed and solved with the objective function of pro?t maximization in the presence of comparative, multipurpose and impulse shopping behavior. Several hypotheses result about the optimal relationships between store types, sizes, rents, sales, and distances from the mall center. The hypotheses are tested and con?rmed using data from a sample of 689 leases in eight regional and super-regional shopping centers, suggesting that a bid rent explanation is consistent with observed location patterns in malls.

Suggested Citation

  • Charles C. Carter & Kerry D. Vandell, 2005. "Store Location in Shopping Centers: Theory & Estimates," Journal of Real Estate Research, American Real Estate Society, vol. 27(3), pages 237-266.
    • Handle: RePEc:jre:issued:v:27:n:3:2005:p:237-266
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    References listed on IDEAS

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    7. Tony Shun-TeYuo & Colin Lizieri & Phillip McCann & Neil Crosby, 2011. "Rental Values in UK Shopping Malls," Urban Studies, Urban Studies Journal Limited, vol. 48(8), pages 1667-1679, June.

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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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