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| A Simulation Analysis of the
Relationship between Retail Sales and Shopping Center Rents Author: Gregory H. Chun, Mark J. Eppli, James D. Shilling Start Page: 163 Abstract: This article
examines the variation in rents per square foot among regional shopping centers in the
United States in response to variation in retail sales per square foot. The analysis
breaks new ground by treating base and percentage rents as endogenous functions of retail
sales. The analysis further distinguishes between de facto, if not de jure, fixed and
percentage leases, and between new versus existing leases. Simulation results suggest that
shopping center rents can easily increase in the short-run as retail sales decrease, or
they can easily decrease as retail sales increase. In addition, the results suggest that
shopping center rents per square foot generally react more aggressively to an increase in
retail sales per square foot over time than to a decrease in retail sales per square foot,
all else equal. |
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