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Q: Walmart's Impact on Commercial Property Values ( Answered,   0 Comments )
Subject: Walmart's Impact on Commercial Property Values
Category: Business and Money > Economics
Asked by: atlasshrugged-ga
List Price: $75.00
Posted: 13 Mar 2005 21:26 PST
Expires: 12 Apr 2005 22:26 PDT
Question ID: 494209
A Super Walmart is under construction in my area. I would like to know
what the likely economic impact will be on commercial property values
in the general vicinity.

Based on data from previous situations where Walmart has built a new
store, I would like to know what changes have occurred five (or so)
years after the store opened with respect to:

+ Commercial land values within two, five, and 10 miles of the
Walmart. Ideally, this answer will be in terms of dollars per acre.

+ Commercial rents within two, five, and 10 miles miles of the
Walmart. Ideally, this answer will be in terms of dollars per square

The research reported at reflects the
type of analysis that would be very attractive. However, I suspect
that such research probably does not exist with respect to my
questions specifically.

Please provide the sources of the data.

Request for Question Clarification by czh-ga on 15 Mar 2005 15:31 PST
Hello atlasshrugged-ga,

I?ve read your comment about your interest in possible future
commercial development next to the new Osprey, Florida Wal-Mart on one
of your other questions. This gave me a better understanding of this
current question.

My preliminary research on your very specific question on the likely
economic impact of Wal-Mart on commercial property values comes up
with a blank. I don?t think anyone has conducted research at such a
detailed level. On the other hand, I have found other research reports
similar to the one you cited. Some of them were conducted by academic
institutions while others were commissioned by communities targeted
for new Wal-Mart stores. I?m afraid most of these reports are highly
negative. Granted that some of them were developed by organizations
that are openly hostile to Wal-Mart, nevertheless, even these reports
will give you a good perspective of the opposition arguments. I?ve
also found a few reports on the impact of Wal-Mart specifically on
retail stores that might meet your needs.

Please let me know if the research I?ve found will provide a
satisfactory answer. I look forward to your clarification.

~ czh ~
Subject: Re: Walmart's Impact on Commercial Property Values
Answered By: vercingatorix-ga on 24 Mar 2005 09:11 PST
I found much of the data you request, though I cannot post it here for
copyright reasons. I have provided links for you. However, while the
studies I found are uniformly negative, overall evidence regarding the
effect of Wal-Mart construction on property values appears mixed.

What does this mean to you? No hard and fast national statistics are
available, simply because the effects aren?t the same everywhere.
There have been a few reputable studies conducted on a regional basis,
but you?re not going to get them for free. Fortunately, Sprawl-Busters
( provides a number of
them for nominal ($5 or under) donation that covers copying and
mailing costs.

I have viewed data from some studies, and for copyright reasons, I
cannot post it here. I do, however, recommend that you visit the
Sprawl-Busters site and purchase:

Fiscal & Economic Impact of Proposed Shopping Center Project on City
of Leominster	08/03	Tom Muller study of 510,000 s.f. Wal-Mart, Lowe's
and Kohl's on city of Leominster, MA	22 pages	$2.20
Econ. Impact of Proposed W-M on Woodstock, VA	8/97	Tom Muller study	5 pages	$1.00

What Happened When Wal-Mart Came to Town?   	5/96	Muller/Humstone
report on econ. impacts in seven Iowa counties	     50 pages	$5.00

These studies, all conducted by the same man, will provide you with
property-value data for three areas. The results are profoundly
negative. The 1996 study showed that in certain Iowa towns with
Wal-Marts near the city center, property values declined by 16% to

Those studies, however, do not tell the whole story.

Wal-Mart critics are much louder than its supporters, but there does
seem to be evidence that Wal-Marts can enhance property values in
areas with a high level of demand for commercial space.

On the fifth page of the report at
detailing a panel discussion of economic development in San Diego, one
of the members said, ?Point Loma is a case where there are currently
6-7 grocery stores in the community, some of which are independent. If
a Wal-Mart supercenter were developed in the Sports Arena area, half
of those stores might close, resulting in less choice and more
traffic. In other communities with an existing deficiency of
commercial services the impact could be quite different.?

The success of the commercial enterprises in an area has a direct
effect on property values. And the addition of a Wal-Mart to an area
that doesn?t have enough commercial space could increase customer
traffic, thus adding value to all of the businesses in the area.

More traffic = higher sales = higher profits and cash flows = higher
values for the business and its property.

While more detailed statistics cannot be posted in this forum (re:
studies listed above), I did find several sources of anecdotal
information that could help you:

Bearish case:

A Web site opposing the development of a Wal-Mart
( cites a study by Thomas
Muller of the effect of Wal-Marts in Iowa as well as research done by
other municipalities. This is one of the studies you can purchase at
Sprawl-Busters. Here are some excerpts from the Web site:

?Property values in some Iowa towns with Wal-Marts near their
commercial centers have declined by 16% to 20%. (Muller, ibid, pp.7).
The Iowa study further indicates that "although the local tax base
added about $2 million with each Wal-Mart, the decline in retail
stores following the opening had a depressing effect of property
values in downtowns and on shopping strips, probably offsetting the
gains from the Wal-Mart property." (Muller, ibid, p. 46)?

?In considering a Wal-Mart near their downtown, the Planning Board of
North Elba, New York, commissioned a study. Upon obtaining the results
of that study, the Planning Board ruled that "the project will likely
result in a large amount of impacted retail space, which could take up
to 14 years to refill, over 20,000 s.f. of which could become
chronically vacant...such loss would have economic impacts on the
remaining merchants, resulting in a downward spiral in which
increasing numbers of businesses close their doors." (North Elba
Planning Commission, North Elba New York, May, 1995)?

In Greenfield Massachusetts, "an Economic Impact Assessment of the
construction of a 134,272 s.f. Wal-Mart -- paid for by Wal-Mart --
found that their project would lead to a loss of 239,000 s.f. in
retail space, with a loss of nearly $36 million to existing
businesses, and instead of 177 new jobs at Wal-Mart, 148 jobs would be
lost at other businesses, leaving a net of 29 jobs..." (Economic
Impact Studies, A Sampler: Studies of Big Box Retailers Conducted in
Various Communities, pp.25, Sprawl-Busters, 21 Grinnel St., Greenfield
MA, 01301,, 413-772-6289)?

Large amounts of vacant space will lower property values as well as
commercial rents ? the law of supply and demand will see to that.

At, you can
read a court ruling upholding an environmental board?s denial of a
permit for a Wal-Mart in St. Albans, Vermont. The ruling states that
one reason the board used to justify the denial was that property
values would decline ? the ruling stated, ?There is no compelling
indication of error in the Board's interpretation . . .? of a rule
that allows consideration of costs in the approval decision. The
implication is that lower property values would lower the town?s
revenue, thus making it less able to provide services.

At, we read the
following quote from the National Trust for Historic Preservation:
?Although the local tax base added about $2 million with each
Wal-Mart, the decline in retail stores following the opening had a
depressing effect on property values in downtowns and on shopping
strips, probably offsetting gains from the Wal-Mart property.?

A study by an Iowa State University researcher
neatly breaks down the decline in retail sales for various types of
retail groups. It?s worth reading for anyone interested in Wal-Mart
construction. In general, sales increase for the first two years, stay
steady for another five years or so as local retailers lose market
share at Wal-Mart?s expense, and then dip in the future years.

The study contains useful tips on how local retailers can compete with Wal-Mart.

The biggest criticism of the bearish case on Wal-Mart is that the
people shouting the loudest appear to be the least objective. That?s
why reading the entire studies, rather than just quotes from them, is
so important.

Bullish case:

New construction tends to raise property values in areas with low
vacancy and a strong demand for commercial space. Check out the report
at for some examples.

While Wal-Mart?s effects on rival retailers are well-documented, in
areas with high population growth and strong economies, Wal-Marts
appear to raise property values.
?The city of San Bernardino showed the third-largest increase in
property values, at $669.8 million. Major new retail projects,
including Wal-Mart and Sam's Club, and large new housing tracts were
credited for part of the gain.?

What will kill property values is vacancy. What will enhance property
values is increased customer traffic. An economy that can absorb a
Wal-Mart without substantially increasing vacancy in surrounding
retail property is likely to see a rise in traffic and a subsequent
boost to property values.

Bottom line:

A lot of communities are opposing Wal-Mart development. You can follow
the fight in California by reading the stories linked in the right
column of I found dozens of
other Web sites opposing Wal-Marts in my research for your question.
However, opposing the Wal-Mart might not be the best idea for every

It is easy to prove the importance of economic development and the
positive effects of retail construction on existing retail areas in
the form of using up vacant space, adding services that increase
customer traffic, and increasing the visibility of shopping areas. It
is equally easy to demonstrate the deleterious effect of Wal-Mart on
existing retailers ? particularly in rural, sparsely populated, or
economically depressed regions.

I must say again that there are no statistics that show a national
effect. I?d advise you to carefully review the regional data collected
by Thomas Muller. I?d also advise you to consider that areas that
benefited from a Wal-Mart normally do not do such studies. More to the
point, they are usually areas experiencing lots of development, and as
such it is difficult to pinpoint the effect of Wal-Mart and separate
it from the effects of, say, new J.C. Penney or Albertson?s stores.

Unfortunately, the only way to collect statistics that apply directly
to Wal-Mart is to get them from an area in which the Wal-Mart is one
of very few new additions to the marketplace. Almost by definition,
such places will be small and economically depressed, and as such be
exceptionally vulnerable to Wal-Mart?s retail side effects.


Other interesting links regarding Wal-Mart, economic development, and
urban sprawl include:

An online ?newspaper? solely addressing Wal-Mart issues.

A proposal for structured development.

A rant against wealthy people using economic development to
discriminate against the poor.

An excellent series on the effects of Wal-Mart?s business model. 

In interesting article on urban sprawl.

A story on how to beat Wal-Mart.

Search strategy:

Google search for: "Wal-Mart" effect "property values" increase
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