Store Location in Shopping Centers: Theory & Estimates

Charles C. Carter () and Kerry D. Vandell ()
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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

Journal of Real Estate Research, 2005, vol. 27, issue 3, pages 237-266

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.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2005
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