Developers typically assess ground-floor retail solely by the rent it generates, but Ann Ehrhart, a Boston-based retail strategist and founder of EVERSTREET, contends that this metric overlooks a broader economic impact. “A property’s address doesn’t change, but its location value can improve,” Ehrhart said. Her firm begins every project by asking how a location can become more valuable, and she views retail as a key tool for achieving that.
Retail’s influence extends beyond its own square footage. Ehrhart cites a restaurant occupying 5,000 square feet that can make people want to live nearby, work nearby, visit more often, and spend more time in the neighborhood. While real estate traditionally measures retail through rent, net operating income, occupancy, and leasing costs, and mixed-use developers also count it as an amenity that helps lease apartments or offices above, Ehrhart argues that these measures fail to capture the full economic impact of great retail and great place. “The storefront creates the experience,” she said. “The location captures the multiplier.”
Research reviewed by Ehrhart shows that walkable, mixed-use environments command measurable premiums in home values, apartment rents, and office and retail rents compared with less walkable locations. Municipal research also indicates that walkable mixed-use districts generate more property tax revenue per acre than lower-density development. She emphasizes that the premium is not about sidewalks themselves: “People aren’t paying a premium for sidewalks. They’re paying for what the sidewalks connect them to.” Restaurants, shops, fitness, entertainment, services, and public spaces give people reasons to walk and to choose one location over another.
This dynamic is not confined to established downtowns. In larger master-planned developments, ownership can shape density, streets, public spaces, dining, and connections between uses. “You’re creating a location rather than simply reacting to one,” Ehrhart said, underscoring the importance of planning for future location value.
However, more retail square footage does not automatically yield better outcomes. Ehrhart stresses that the multiplier comes from the right retail, not the most retail. EVERSTREET evaluates fit through market demand—defined as the intersection of consumer and tenant demand—and then aligns merchandising, design, and underwriting around it. “A great retail ecosystem isn’t necessarily the biggest one,” she said. “It’s the one people actually want to use and operators can successfully occupy.” This principle is central to the firm’s mission: tenants must be supported by the surrounding community for the space to perform over time. Retail that the neighborhood doesn’t use works against a project.
At the storefront level, Ehrhart encourages developers and investors to ask not only how much rent a tenant can pay but also what the retail investment can do for the value of the location. The highest-paying tenant may not be the one that most enhances residential retention, office demand, or foot traffic. This does not mean subsidizing retail without discipline, she says, but being clear about the return sought and where it will appear—whether in storefront income, residential rents, retention, office demand, visitation, land value, or future development potential. “That’s when retail becomes a capital allocation conversation, not simply a leasing conversation,” Ehrhart said. For developers weighing a mixed-use program, the practical step is to look beyond what a storefront is worth on its own. “The question shouldn’t only be, what is this storefront worth?” Ehrhart said. “We should also be asking, what can this storefront do for the future value of the place around it?”
