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Retail Mixed Use Market Study Update 1 January 6, 2010 Retail Demand by Store Categories This analysis generates retail demand estimates by retail category, within the umbrella categories of "Prepared Food" and "Retail Before /During /After Work." Within the "Prepared Food" category are expenditures for `lunch' and `food and drink after work.' Due to a lack of available spending on food purchases before work, expenditures on coffee and breakfast items are not included in the "Prepared Food" category. "Retail Before /During /After Work" contains the "Various Merchandise" category, which includes general merchandise apparel, home furnishings and electronics'; grocery; and convenience items. These categories are described in more detail below. This analysis estimates the long -term retail demand generated by office, R &D and flex employees in Hacienda. The assumptions about weekly retail spending are intended to represent spending patterns over the long -term, and therefore do not reflect a short -tern reduction in spending due to the current economic downturn. Prepared Food The "Prepared Food" category includes expenditures for `lunch' and 'food and drink after work.' Predictably, lunch expenditures are a much greater share of worker prepared food expenditures (87 percent) than food and drink after work (13 percent). Suburban office workers on average spend approximately $8 per lunch, 3 times each week. Given that the average travel time to lunch is 6 minutes, this analysis assumes that 95 percent of lunch expenditures are made in the park (a capture rate of 95 percent). Survey respondents estimate that they spend approximately $15 per week on food and drink after work, and that 25 percent of these expenditures occur closer to work than to home. A capture rate of 25 percent is therefore applied to food and drink after work. In order to translate annual prepared food expenditures into actual supportable square feet of restaurants, annual expenditures are divided by typical restaurant annual sales per square foot. Sales levels for lunch venues, including a range of fast food and casual dining restaurants, are estimated at $400 per square foot. Sales levels for 'food and drink after work,' are estimated at $500 per square foot, based on the sales of typical sit down restaurants such as Cheesecake Factory, Applebee's and PF Chang's. Retail Expenditures Before /During / After Work Retail Expenditures Before, During and After Work are divided among two categories of goods: groceries and `various merchandise,' which includes general merchandise, apparel, home furnishings, electronics, and convenience items. Weekly expenditures on retail (including groceries) purchased before, during or after work amount to a total of approximately $108. Purchases made during work include lunchtime retail (non - prepared food) expenditures. Survey respondents report that they make shopping trips before, during or after work 2.6 times per week, on average. Fifty -five percent of such purchases are made closer to work than to home. Given the limited retail supply within the park, a more conservative capture rate of 39 percent is applied to Retail Expenditures Before /During /After Work. Most of these purchases are made after work, rather than in the morning or the workday. By category of goods, purchases were broken down at follows: Table 4: Average Weekly Spending, by Category Various Merchandise $81 Grocery $27 Total $108 Source: Office Worker Soendina Patterns. 2004. ICSC: Strateaic Economics 2009 In order to translate total sales Into supportable square teet of retail space, annual expenditures are divided by typical sales per square foot. Sales per square foot in the broad category of `general - 18-