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The Grocery Store Effect: How New Grocery Stores Impact Multifamily Rents in the Washington Metro Area

The Grocery Store Effect: How New Grocery Stores Impact Multifamily Rents in the Washington Metro Area

May 2019
This white paper analyzes the impact of new grocery stores on rental rates for surrounding multifamily assets

Key findings of the report include:

  • Throughout the Washington metro area, proximity to a new grocery store correlates with a significant apartment rent premium over the submarket average rent.
  • Most of the properties with proximity to new grocery stores saw a rent increase correlated with the store’s opening.
  • At the time of a store opening, apartments surrounding Whole Foods stores received the greatest rent premium out of the seven chains studied.
  • Apartments within the radius of grocery stores in mixed-use developments were able to elicit a rent premium much higher than those surrounding free-standing stores or stores located in shopping centers.
  • Overall, grocery-anchored apartment properties enjoyed a significant rent premium over their submarket average and also over the other apartments with proximity to the new grocery store in the year after it opened.

The study concludes with implications for Mid-Atlantic multifamily investors.