TO: Wesley Ley, Real Estate Developer FROM: Danny Logarakis, Real Estate Analyst DATE: May 10,

2012 SUBJECT: Market/Demographics Analysis

The location Street is in the heart of the River North neighborhood of Chicago. The majority of the population being in a higher tax bracket and young in age, River north is a hot and flourishing area. There is an abundance of unique restaurants, bars/clubs, and home furnishing stores. The population is fairly large with little room to grow due to how vacant residences are very low. The proposed retails are optimal choices not only because they cater to the needs of the demographic but also are currently in shortage. I propose that the all of the current retails that occupy 664 N Wells St. be replaced with four new and very different stores. The landlord should stray away from placing just another run at the mill restaurant or bar and place retails that would have much less competition in the River north area. A jewelry store, electronic goods store, daycare center, and a YogaPilates studio each would be one of the few of its kind in the area. Summary: River North has developed into a community with many fine restaurants, bars, and nightclubs. This has made the neighborhood a hot spot to dine and socialize. River North is also one of the more wealthier and affluent neighborhoods of Chicago. These characteristics of River North have made it one of the most sought after places to be and live in. Currently 664 N Wells St. is occupied by: MRI of River North, Cocoro Sushi, Luminosity lighting store and Kenmore Live. These retails should all be replaced with others that have a greater potential for future growth, higher demand, and less competition. The MRI of River North is a valuable health service provider, however it does not fit in very well with the atmosphere of the area. The Sushi restaurant may be a popular sushi place but it is one of many in the area and may have difficulty holding a competitive edge over the others. The Kenmore live and Luminosity lighting retails supply household appliances to the many residents in the area, but they have pasted their prime. When the community was still developing, household appliances were in heavy demand, now that the residents have settled in and with little new housing developments the demand for household appliances is greatly reduced. Analysis: In the River North area over twenty percent of the population is in the age group of 2534. This age group is a prime target for jewelry sales because the younger generation is getting older and more likely to start buying long-term valuable items. In conjunction with a higher income, the demographic not only has the will but also the means too, thus increasing the demand for jewelry. The median household income within a five-mile radius is projected to be at just under $100,000 by 2015 and 13.5% of households in a three-mile radius projected to have an income of over $200,000. With this outlook on

income levels the potential for sales of high-end jewelry is substantial. Lacking very much competition, a high-end jewelry would be prime in generating new means of revenue for the area. Another great retail opportunity to occupy the space would be an electronic goods store. An electronic goods store is a great alternative to the current lighting store. The current lighting store may have been profitable when people were first moving into the area and needed new lighting fixtures, but now that over 90% of housing is occupied the frequency of returning customers is low. An electronic goods store on the other hand would have a higher rate of returning customers because technologly is constantly progressing and their will always be newer gadgets and gizmos for people to buy. As previously stated the demographic of the areas population has a greater amount of disposable income enabling the inhabitants to spend more on luxury goods such as ipads and such. Even though the amount of people purchasing electronics on is increasing, a high-end electronic goods store would not be affected. A high-end electronic goods store such a Sharper Image or Bose concentrate on selling very specific and specialized technology that often has to be heard, felt, or tested. The amount of electronic goods stores in the area is also very low. As a resident of the area myself I often have to travel out of the neighborhood for my electronic goods. Having a local electronic goods store would provide a great convenience to the community. The residents of River North are working professionals many of whom would enjoy the convenience of a local daycare. There is a large and untapped market for a daycare center. There are currently 47,360 occupants in a 5 miles radius of the location that are under the age of 4 years and by 2016 there will be 52,758. The demand for a daycare center is growing. The daycare center would also hold a competitive edge because it would be one of the very few in the area and would be able to gain a considerable share of the market. With these demographics a daycare center would fit perfectly into the neighborhood. The River North community is very trendy in terms of both fashion and lifestyle. As trends are ever changing, so must the real estate. The affluent people of River North are up to date on the latest health sciences and practices. Getting MRIs and other health services offered by MRI of River North was the thing to do to maintain optimal health. Today many young professionals are practicing yoga- Pilates, especially women. X% of the population in a 5-mile radius is women. Yoga studios have been popping up just about everywhere, everywhere but River North. These studios are present throughout Chicago and their success can be replicated in River North. Core Power Yoga in Lincoln Park would be a prime example. The Lincoln Park neighborhood is similar to River North in the way that they are both affluent and trendy. Core Power Yoga has been in Lincoln Park for X years and is a growing franchise. Yoga studios are a growing trend and demand is increasing. The residents of River North have a desire for higher-end services. Placing a higher-end yoga studio that is more specialized and personalized would supply the demand of women in River North.

Closing: In order to keep pace with the changing neighborhood the MRI of River North, Cocoro Sushi, Luminosity lighting store, and Kenmore Live should be replaced with a high-end jewelry store, electronic goods store, daycare center, and a Yoga-Pilates studio. They cater to the populations desire for higher-end products and services. The proposed new retails will also be supplying the growing demands of the neighborhood that 664 North Wells St. is located in.