appendix 5: existing business conditions in the

kensington study area

 

Appendix

Kensington and Vicinity Sector Plan Appendix | 59

 What is retail gap or opportunity analysis? It is a gross measure that shows, within a defined
geography, the amount spent on retail merchandise and food services by consumers (residents) and
the amount of sales reported by stores in that area. If demand (consumer spending) is greater than
store sales, then there is a gap that suggests an opportunity for a new entrant into the market. A
surplus, on the other hand, indicates that stores in the area could not only satisfy the needs of local
residents, but draw consumers from outside the area.
Source: 2007 Claritas SiteReports

Research & Technology Center

Briefing

-- Montgomery County economy

-- Employment in zip code 20895 Kensington vicinity

-- Major Employers in Kensington Study Area

-- Commercial space statistics for Kensington Study Area

-- Retail activity in Kensington Study Area

Kensington and Vicinity Sector Plan Appendix | 60

 Research & Technology Center

Uptick in region’s inflation rate

6.0%

5.0%
5.0%

4.2%
4.0%

3.0%

2.0%

Region Nation
1.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008

Research & Technology Center

Source: U.S. Bureau of Labor Statistics

County unemployment rate inches up

since last year
2000 to 2008

6.0% 5.7%

5.0%

4.0%

3.0%
2.9%
2.0%

County Nation
1.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: U.S. Bureau of Labor Statistics

Kensington and Vicinity Sector Plan Appendix | 61

 Research & Technology Center

Job growth has declined

Montgomery County lost 3,880 jobs from 2006 to 2007—a 0.8 percent decline.

20,464
18,032
Change from prior year
(2nd quarter)
10,847
9,410 9,792
8,323
7,243
5,873
4,019
2,606 2,773 2,685 2,159 1,921
1,354

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: RESI compilation of Bureau of Labor Statistics QCEW data (2006 2Q)
-3,880

Research & Technology Center

Source: Maryland Department of Labor, Licensing and Regulation (DLLR) ES-202 data

Professional and Technical Services

largest industry in County
County Industry 2001 2002 2003 2004 2005 2006 2007
Natural Resources and Mining 491 538 685 675 813 849 911
Construction 27,883 29,470 28,905 29,493 29,519 30,807 31,050

Manufacturing 19,034 17,514 16,234 15,372 14,768 14,252 14,631

Transportation, Warehousing, Utilities 15,673 15,640 15,422 16,203 15,446 15,101 14,942

Retail Trade 50,450 50,433 49,100 50,289 48,908 48,286 47,322

Information 17,059 16,063 15,264 14,778 14,938 15,356 14,164

Finance & Real Estate 33,429 33,303 35,204 35,116 36,238 35,812 35,593

Professional & Technical Services 62,000 63,525 61,973 62,061 63,138 65,168 62,613

Business Services 33,928 32,185 34,061 36,126 37,903 41,649 41,164

Education & Health Services 49,901 52,051 53,673 55,954 57,031 58,541 59,003

Leisure & Hospitality Services 38,104 38,015 39,045 37,610 40,380 38,565 38,365

Other Services 21,252 21,544 22,014 21,488 21,794 22,179 22,162

Private Sector Employment 370,611 370,693 372,087 375,790 380,876 386,565 382,563

Total Employment 452,037 454,198 452,170 456,035 460,793 466,666 462,786

Source: Maryland Department of Labor, Licensing and Regulation (DLLR) ES-202 data

Kensington and Vicinity Sector Plan Appendix | 62

 Research & Technology Center

Manufacturing and professional services

are County’s high-wage industries
County Industry Average Weekly Average Annual
Wage Wage
Natural Resources and Mining $857 $41,993
Construction $1,059 $51,866
Manufacturing $2,426 $118,874
Transportation, Warehousing, Utilities $670 $29,082
Retail Trade $594 $32,830
Information $1,482 $72,609
Financial Activities $1,432 $70,168
Professional & Technical Services $1,531 $75,043
Business Services $1,161 $56,889
Education & Health Services $869 $42,581
Leisure & Hospitality Services $384 $18,816
Other Services $662 $32,460
Federal Government $1,384 $67,816
State & Local Government $842 $41,258
All Industries $1,097 $53,753
Research & Technology Center
Source: M-NCPPC analysis of 2007 DLLR ES-202 data

2/5 of Montgomery County households

have incomes of $100,000 and over
> $10,000

3.2% $10,000 - 24,999

Over one-fifth of all 12.9%
jobs in Health Care 6.3%
$200,000 +
16.5%

$25,000 - $49,999
30.5%
2006 Household Income Distribution
$100,000 -
$199,999
30.6%

$50,000 - $99,999

Source: U.S. Census Bureau, 2006 American Community Survey

Kensington and Vicinity Sector Plan Appendix | 63

 Research & Technology Center

Kensington & vicinity – zip code 20895

2008 Population
19,601

2008 Households
7,676

2008 Average Age

41 yrs

Median Household
Income (2007)
$107,157

2008 Jobs
11,212
Research & Technology Center Source: 2008 Claritas Site Reports; 2008 Dun & Bradstreet

Half of households in Kensington and

vicinity have incomes of $100,000 and over
<$15,000

$250,000+

$25,000-
$49,999

2007 Household Income Distribution

Zip code area 20895

Source: 2008 Claritas Site Reports

Note: Zip Code 20895 includes parts of North Bethesda and Wheaton

Kensington and Vicinity Sector Plan Appendix | 64

 Research & Technology Center

Uneven growth in Kensington and vicinity

Largest decline in jobs in 2005; smallest increase in 2001

9,381 9,394 9,231 9,265 9,395 8,798 8,889

668 678 694 703 724 727 721

2000 2001 2002 2003 2004 2005 2006

Jobs Establishments

Source: M-NCPPC analysis of U.S. Census Bureau’s County Business Patterns

Research & Technology Center
Note: The 20895 zip code includes parts of North Bethesda and Wheaton

Retail, construction, and health care main

employers in Kensington and vicinity
Industry Share of Total Employment in zip code 20895
2000 2003 2006
Construction 6.4% 11.7% 11.7%
Manufacturing, Transportation, Warehousing 10.3% 13.6% 8.6%
Information 0.7% 1.2% 1.0%
Retail Trade 26.0% 23.5% 22.2%
Administration & Support 5.2% 5.2% 6.3%
Finance Activities (including Real Estate) 10.0% 6.5% 8.4%
Professional Services 7.9% 7.6% 9.9%
Educational Services 2.7% 3.2% 3.4%
Health Care & Social Assistance 10.7% 12.3% 10.9%
Leisure & Hospitality Services 12.3% 9.7% 9.3%
Other Services 7.8% 8.5% 8.2%
Private Sector Employment 9,381 9,265 8,889

Source: M-NCPPC analysis of U..S. Census Bureau’s County Business Patterns data

Note: The 20895 zip code includes parts of North Bethesda and Wheaton

Kensington and Vicinity Sector Plan Appendix | 65

 Research & Technology Center

Kensington Study Area

2007 Population
1,654

2007 Households
675

2007 Average Age

41 yrs

Median Household
Income (2007)
$75,588

2008 Jobs
4,836
Research & Technology Center
Source: 2008 Claritas Site Reports; 2008 ReferenceUSA Business Listings

Labor union and County agency

top employers in study area
Bakery & Confectionery Union 181

Housing Opportunities Commission 130

Pizza Brothers East 100

Jubilee Association 80

McDonalds Restaurants 80

Signal Financial 60

US Postal Service 56

Spacesaver Systems 50 2008 Employment

at largest job location in
Worch Electric 50 study area

Kaiser Foundation 45

Source: Dun & Bradstreet Selectory Online

Kensington and Vicinity Sector Plan Appendix | 66

 Research & Technology Center

Most businesses in study area occupy

industrial space
Class A
Total Commercial Space 2%
1,036,950 sq. ft.

Vacancy Rate
2.0%
Industrial
Class B
40%
Average Age of Buildings 35%
40 yrs

Number of Office Buildings

34 Class C
13%
Number of Industrial Buildings Flex
10%
37

Research & Technology Center Source: CoStar Inc., August 2008

Rental rates for commercial space more

affordable in study area than County
County
$29.58
$29 Kensington

$26

$24.33

$23

$20
2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: 2008 2nd Quarter CoStar

Note: Commercial space includes office space (all classes), flex space, and industrial space

Kensington and Vicinity Sector Plan Appendix | 67

 Research & Technology Center

Rents for industrial space in study area

generally less expensive than office space
Office space

$28 Industrial Space

$25
$24.34

$22

$19

$16

$13
$12.31
$10
2000 2001 2002 2003 2004 2005 2006 2007 2008

Research & Technology Center Source: 2008 2nd Quarter CoStar

479,000 square feet of leasable retail

space in the Kensington study area
• 402,800 square feet is free-standing retail

• 76,200 square feet is neighborhood retail

• Of the 76,200 square feet, 35,800 is found along Howard

avenue (Antique Row). And, 40,400 square feet is in the
Kensington shopping center.

• The study area’s retail vacancy rate is 1 percent.

• The average rent for retail space is $33.32 per square foot.

Source: 2008 2nd Quarter CoStar; M-NCPPC, 2005 Shopping Center Directory.

Kensington and Vicinity Sector Plan Appendix | 68

 Research & Technology Center

There is no retail gap between

store sales and consumer demand
• Stores in the study area draw consumers from outside the
study boundary: $63.1 million retail surplus.

•However, the study area is missing some types of retail such as

men’s clothing stores, shoe stores, and book stores.

•The study area is also underserved by restaurants and drinking

places: $700,000 retail opportunity

What is a retail gap or opportunity analysis? It is a gross measure that shows ,within a defined geography ,the amount spent on retail merchandise and
food services by consumers (residents) in that defined geography and the amount in sales reported by stores in that area. If demand (consumer
spending) in the area is greater than store sales, then there is a gap which suggests an opportunity for a new entrant into the market. A surplus, on the
other hand, indicates that stores in the area not only could satisfy the needs of local residents but draw consumers from outside the area.

Source: 2007 Claritas SiteReports

Kensington and Vicinity Sector Plan Appendix | 69