Retail Last updated: 1/15/2013

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1 Retail Last updated: 1/15/2013 Downtown features a blend of nationally recognized retail stores as well as hundreds of independent retailers sprinkled throughout the neighborhoods, offering apparel, gifts and merchandise unique to Seattle. Of the 3,840 occupied street-level businesses in Downtown i, 1,139 are retail and 2,568 are services such as restaurants, fitness centers and salons, creating a vibrant, unique pedestrian experience. Perhaps the most famous of all the great Downtown retail destinations is Pike Place Market. Attracting 10 million visitors a year, the beloved farmers market is a destination for tourists. It is also a place to shop for Downtown residents and workers looking for fresh seafood, produce, flowers, hand-crafted items and much more. Flagship Stores Downtown Seattle is home to numerous flagship stores, including brands that have changed the way Americans shop, dress, enjoy the outdoors and eat. Flagship stores include Ben Bridge Jewele, Filson, Gene Juarez Salon and Spa, Nordstrom, REI, Starbucks, Top Pot Donuts, Utilikilts and Uwajimaya. New Retail and Restaurants In 2012, Nordstrom opened a new Nordstrom Rack store in the mezzanine level of Westlake Center; Target opened a new urban concept store in the Pike Plaza building at Second Avenue and Pike Street. Other new retail locations in Downtown in 2012 include Carhartt, Sell Your Sole, Pioneer Pet, Destination Maternity, Art of Shaving and Bella Umbrella, among others. In addition to dozens of new retail shops, more than a hundred new restaurants have opened up Downtown in the past two years including a number of new Tom Douglas restaurants in South Lake Union and RN74 in the Retail Core. Retail Market Highlights From 2012 to 2013, Downtown retail vacancy increased from 7.2 percent to 7.5 percent Downtown lease rates remain strong at $37.21 in 2012, roughly the same level as 2011 ($37.08). Puget Sound retail vacancy rates decreased from 8.8 percent to 7.3 percent while lease rates increased from $21.22 to $ On the Eastside, vacancy rates decreased from 8.0 percent to 6.0 percent while lease rates increased from $24.10 to $ Source for retail market statistics: CB Richard Ellis. CB Richard Ellis retail data includes properties with 25,000 square feet of multitenant retail space, power centers and stand-alone buildings with at least 25,000 square feet of retail space.

2 Retail Market Statistics Overall retail occupancy rates in the Puget Sound region fell from 96 percent in 2007 to 91 percent by 2011 and in 2012 still have not fully recovered. Year-over-year, the region saw an increase and was 93 percent by the end of The Eastside market experienced stronger occupancy in 2012, but has also not fully recovered to 2007 figures. The Bellevue CBD submarket saw occupancy rates flatten out year-over-year after an increase from 95 percent in 2010 to 97 percent in 2011 (remaining at 97 percent in 2012). 100% Retail Occupancy 98% 96% 94% 92% 90% Puget Sound Downtown Seattle Eastside Bellevue CBD Source: CB Richard Ellis 2 nd quarter statistics Despite an increase in vacancy, Downtown Seattle retail lease rates remained strong at roughly $37 per square foot in 2011 and 2012 after peaking at $42 in Since 2007, the Eastside and Bellevue CBD both saw lease rates decline (by 15 and 10 percent, respectively. At the same time, the overall Puget Sound market and the Downtown submarket both saw rates increase (by 10 and 7 percent, respectively) $45.00 Asking Lease Rates $40.00 $35.00 $30.00 $25.00 $ Puget Sound Downtown Seattle Eastside Bellevue CBD Source: CB Richard Ellis 2 nd quarter statistics

3 Street-Level Retail The Metropolitan Improvement District conducts an annual Street Level Business Inventory in Downtown Seattle. It is conducted during the summer of each year and focuses ground level storefronts within twelve neighborhoods in Downtown Seattle ii. In addition to individual street level businesses, eighteen retail areas and malls with multiple units are included in the study. Major categories include Education, Government, Industrial, Retail, Services and Housing (note: housing is excluded for this analysis). Comparable data are available for all Downtown neighborhoods beginning in A summary table appears in the Appendices. Retail businesses make up 30 percent of all street level businesses in Downtown Seattle. West Edge is the neighborhood with the greatest share of retail businesses, with 55 percent of businesses falling into this category (in other neighborhoods, service businesses comprise the majority). West Edge also has both the highest number and highest density of street level businesses Downtown. Including Pike Place Market, there are 330 retail businesses at street level in West Edge. That s 29 percent of the 1,139 total retail businesses in Downtown. The Merchandise/Gifts subcategory makes up the largest share of retail businesses Downtown (38 percent), followed by Clothing & Accessories (19 percent). More than half the retail along the Waterfront (59 percent) falls in this subcategory. For Downtown, the Merchandise/Gifts category increased from 33 percent to 38 percent of the total retail businesses from 2007 to Clothing & Accessories represents 19 percent of retail businesses Downtown. Clothing & Accessories businesses are concentrated mostly in the Retail Core, with 43 percent of retail (81 businesses) falling in this subcategory. Since 2007, the Clothing & Accessories categories share of the total retail businesses has fallen from 24 percent to 19 percent. Overall, the number of street level retail establishments recorded is down year over year with 33 fewer businesses inventoried in this category in 2012 compared to However, service related storefronts increased over the same period (see Street-Level Services on the following page). Downtown by the Numbers: Retail Merchandise / Gifts 437 Clothing & Accessories 212 Arts Home / Office Décor Grocery / Pharmacy Specialty Food, Beverage & Tobacco 88 Auto / Boat Sales Wholesale / Distribution Department Store

4 Street-Level Services The Street-Level Business Inventory tracks categories other than retail. The largest category in the inventory is Services. This is the largest category in every neighborhood with the exception of the West Edge neighborhood (where 55 percent of businesses in the inventory are categorized as retail). Restaurants, Bars & Cafes make up the largest subcategory for service businesses Downtown (43 percent). This is the largest share in each Downtown neighborhood with the exception of SoDo, where trade services comprise a third (33 percent) of all service businesses. The Professional Services subcategory has the second largest share in all neighborhoods except for the Retail Core and the Waterfront. In the Retail Core, Financial Services is the second largest subcategory representing 10 percent of all Service businesses. Cultural businesses represent the second largest category in the Waterfront neighborhood with 18 percent of all street-level services in the Waterfront neighborhood. For the past two years, Downtown experienced an increase in service oriented street-level businesses such as salons, spas and restaurants. From 2011 to 2012, there were 103 additional records in the services category. The largest share of the increase was in the Restaurant, Bars & Cafes subcategory. This category increased from 1,027 to 1,095 addresses recorded between 2011 and Increases were experienced in every neighborhood led by West Edge (an increase of 15 establishments), followed by Pioneer Square (10) and South Lake Union (9). When housing is included, that is the largest category on Capitol Hill. However, excluding housing, 78 percent of businesses are in the Services category (4 out of 10 of those are restaurants, bars and cafes). Downtown by the Numbers: Services Restaurant, Bars & Cafes 1,095 Professional Services 487 Personal Services 307 Financial Special Interest Groups Trade Services Cultural Hotels & Inns Human Services Technology Services News / Media Transportation

5 Number of Occupied Street-Level Retail and Service Businesses by Neighborhood Belltown Capitol Hill Denny Triangle First Hill International District Pioneer Square Retail Core SoDo South Lake Union Uptown Waterfront West Edge Grand Total 3,775 3,768 3,703 3,527 3,637 3,707 Change in Number of Occupied Street-Level Retail and Service Businesses ( ) Retail Services

6 Percent Change from 2005 Taxable Retail Sales Please note: taxable retail sales data for Downtown Seattle were provided by the Washington State Department of Revenue in This data is a snapshot of the database and may change without notice. Data for other geographies are from officially published Department of Revenue figures. Figures included in this report are for the Retail Trade category (NAICS codes 44-45) except that motor vehicle sales, gas stations and non-store retailers are not included figures were not available at the time of this report. 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% Taxable Retail Sales Downtown Bellevue Seattle Everett Tacoma Redmond Taxable Retail Sales Highlights The chart above shows the percent change since 2005 for retail sales in Downtown Seattle and the five largest cities in the region by employee count. Of the cities chosen for comparison, the Redmond fared the best between 2005 and 2011, with a 21 percent increase in retail sales. Most of this increase was due to electronics purchases. Taxable retail sales in Downtown Seattle were 10 percent higher in 2011 than in Downtown s sales have increased less than those citywide. This has led to a loss in Downtown s share of retail sales. In 2005, Downtown represented 27 percent of all retail sales in the city and 26 percent in Bellevue was the only city to see a decrease in sales from 2005 to Five of the six geographies examined experienced growth in retail sales between 2010 and Redmond led the pack with an 11 percent increase, followed by the Downtown Seattle with four percent growth. Citywide, Seattle saw a three percent growth. Bellevue saw a two percent growth for the same period. Tacoma and Everett saw a slight year over year decrease.

7 Appendix A: Map of Downtown Neighborhoods

8 Appendix B: Street Level Business Inventory Summary Table (Excluding Housing, under construction and vacant addresses) Education Private School Public School iii Government Government Industrial Food / Beverage Production 5 8 Industrial 2 8 Phone Company 4 3 Retail 1,172 1,139 Arts Auto / Boat Sales Clothing & Accessories Department Store 4 Grocery / Pharmacy Home / Office Décor Merchandise / Gifts Specialty Food, Beverage & Tobacco Wholesale / Distribution Services 2,465 2,568 Cultural Financial Hotels & Inns Human Services News / Media Personal Services Professional Services Restaurant, Bars & Cafes 1,027 1,095 Special Interest Groups Technology Services Trade Services Transportation Grand Total 3,757 3,840 i Note: previous versions of this report included housing as a street level business. While multifamily housing addresses are still collected in the database, this analysis excludes the housing category. ii The twelve neighborhoods included in the inventory are Belltown, Capitol Hill, Denny Triangle, First Hill, International District, Pioneer Square, Retail Core, SoDo, South Lake Union, Uptown, Waterfront, and West Edge. iii Nearly all of the public school addresses are associated with Seattle Central Community College.