A Method for Determining Optimal Tenant Mix (Including Location) in Shopping Centers

Abstract

With assumptions like maximally productive lease structure, equilibrium space allocation, a just-saturated retail market, and zero vacancies, store location would be the remaining variable in obtaining “optimal tenant mix.” Here we illustrate an optimization program to maximize tenant location within shopping malls taking into consideration the two complementary effects present in malls: bid rent theory and revised central place theory. Suggested distance and connection matrices for the quadratic assignment program (QAP) solving for an optimal tenant mix are demonstrated.