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Importance of Trade Area Analysis for Commercial Sites/Properties

Trade area analysis defines the characteristics of the area around a particular commercial site/property. Defining a trade area is an important step in any market analysis because it outlines the boundaries that will serve as the basis for additional analysis. A trade area is the topographical area from which a site/property generates most of its customers. This helps businesses identify the opportunities to develop the site/property knowing where their customers are coming from as well as the area for new potential customers. Trade areas are affected by factors such as population density, driving distance, competition, demographic factors, economic factors, sociological and geographical boundaries, and other similar factors. This information provides important insight into the community’s customer base and allows for the analysis of demand for types of development and uses.