3. Floor Area Ratio (FAR)

Given:

a)As retail developer you have acquired land next to an existing shopping center and are seeking financing for a second Center.

b)Your lender is very skeptical, but you argue that the existence of a center at a location does not mean that this site is a poor choice for

developing an (additional) new center.

Question:

Using retail market concepts, carefully explain, generally, when doubling the square footage of retail space at a particular location should lead to a doubling of retail sales in the area?