SERVICE MARKET

10 Minute Drive Trade Area

Non-retail uses such as other commercial and service uses can be expected to draw from a broader geographic area than retail uses can because of their very competitive nature. The array of commercial and service uses is populated with a much larger group of possible entities. This allows the possibility to design a mix of uses that is much more unique than that available to retail. In Oxford Circle’s case, we have defined the service trade area to extend for a 10 minute drive time from the site. Additional information on the social services market is provided in the following section.

Population within this trade area in 2015 is 109,708 persons. Population growth within the trade area is strong between 2015 and 2020, reaching 0.9% annually. This compares to the Lexington metro area, which is growing at 0.90% annually. Nationally the growth rate is 0.75% annually. By 2020, this growth rate results in the trade area population reaching 114,757.

Households within the trade area exhibited similar trends to those of the population. In 2015, the trade area had 45,415 households, up from 43,641 households in the 2010 census. By 2020, households will reach 47,700, growth of 0.99% annually.

Household Incomes within this trade area are significantly below average. In 2015, median household income was $39,498 compared to $51,760 for the metropolitan area, or 31% lower. Today, 58.2% of trade area households have incomes below $50,000. This compares to only 48.1% for the metropolitan area. While growth in incomes is projected to increase by 2.2% annually over the next 5 years, it will lag that within the region. As such, the trade area will continue to fall further behind the region in terms of purchasing power.

Trade area residents are younger, at 31.4 years old, than the metropolitan area at 36.1 years. This younger resident population is reflected in the age distribution of the population. Within the trade area there is a higher concentration of school-aged residents, those under the age of 19 (29.8%), compared to 25.5% within the Region.

Ethnically, the trade area differs from the metropolitan area. In 2015, 73.3 % of the population was white and 9.1% reported being of Hispanic origin. This compares to 80.1% and 6.0% at the metropolitan level. Upon more detailed study, it’s clear that the ethnic character of the trade area is heavily influenced by the immediate area surrounding the project. Within a 10 minute walking time of the project, there

(1) is a total population today of 4,380. This population is much less affluent ($32,179), significantly younger (30.8 years) and heavily Hispanic with 39.8% reporting that they are of Hispanic origin. source: ESRI Business Analyst and Gentleman McCarty/DCI analysis

As the preceding analysis indicates, demand is strong within the 10 minute drive time trade area. The unique market support factors of the trade area will heavily influence the character of the project’s development potential. The key questions that need to be answered are - is demand and supply in balance? Are there sectors of the economy that are under-supplied? Oversupplied?

Demand For Commercial Service Uses

A study of businesses, based upon SIC Codes, in the trade area today indicates that of the 11 classified business sectors, all but two (the Utility and Agriculture and Mining sectors) are over-represented within the trade area today. This analysis is summarized on the attached table, Business Summary, and is based upon a comparison of the trade area to the Lexington metropolitan area. As illustrated, the 3 largest sectors, measured by number of business, have been broken down into sub-sectors to provide for a more granular analysis. Using the metropolitan area as a bench mark, we determined the per capita population needed to support each business in each business sector. For example, within the Retail Trade sector, each business requires 113 persons (4,349 businesses divided into the metropolitan population of 489,562 equals a per capita of 113). Using this target per capita figure, it is estimated that the trade area should have approximately 975 business in this sector but currently has 1,555. This indicates that the 10 minute drive time trade area already contains vastly more businesses than it should, based upon our comparison to the metropolitan norms.

The 10 minute drive time trade area is awash with businesses because the area captures 3 very large business nodes within its boundaries: Downtown Lexington, the UK complex and the Fayette Mall corridor. This doesn’t mean that the Oxford Circle project cannot attract business to the site, but this attraction must be based upon the unique draw of the area based on its two “anchors” which define the project: the Cardinal Hill Rehabilitation Hospital and a new social services complex which might be built on the site, led by a new Library.

Business Summary Commercial Service Trade Area

Data source: ESRI Business Analyst and Gentleman McCarty analysis (1) Targets utilize per capita business information for the County computed for the population within the