sep 5 1985

FEASIBILITY STUDY FOR THE RETAIL COMPLEXIN HARAJUKU, TOKYO, JAPAN

by

Edward C. Yang

Bachelor of ScienceUniversity of California, Berkeley

1978

SUBMITTED TO THE DEPARTMENT OF URBAN STUDIES & PLANNING

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF THE DEGREEMASTER OF SCIENCE IN REAL ESTATE DEVELOPMENT AT THE

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

SEPTEMBER, 1985

O EDWARD C. YANG 1985

The author hereby grants to M.I.T.permission to reproduce and to distribute publicly copies

of this thesis document in whole or in part.

Signature of the author

Certified by

Accepted by

Edward C. YangDepartment of Urbci Studies & Planning

September, 1985

R semary GrimshawDesign Faculty of the Department of Architecture

/Thpesi s Supervisor

Lawrence S. BacowChairman

Interdepartmental Degree Program in Real Estate Development

MASSACHUSE TTS !NSTTUT'OF TECHN6 TDUy -

SEP 0 5 1985

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The feasibilty study of retail complex in the townof Harajuku in Tokyo, Japan.

by

Edward Yang

Submitted to the Department of Urban Studies andPlanninQ on August 16, 1985 in partial fulfillmentof the requirements for the Degree of Master ofScience in Real Estate Development.

ABSTRACTThis thesis is a feasibility study of a

development of a retail complex in a town calledHarajuku in the Shibuya-ku district of Tokyo, Japan.The nature of the development is a marketplace withan emphasis on fast foods, ethnic foods andrestaurants on 12,500 square feet site.

The study also traces several transformationsof the town of Harajuku between 1970 to 1980, as aresult of the rapid growth and infusions of the daytimevisiting population to Harajuku from the suburbs of Tokyo.

Thesis Supervisor: Rosemary GrimshawTitl.e: Design Faculty of the Department of Architecture

Preliminary IntroductiOn

Greater Tokyo Metropolis is divided into twenty-three districts. One of these, ShibuVa-ku consistsof seven towns. They are Yoyogi, Shibuya, Shoto,Sendagaya, Ebisu, Harajuku, Hiroo and Shinjuku. 04these towns Harajuku is the primary focus of thisst Ud y.

The site under consideration for development liesin the western part of Harajuku . The site iscertain to maintain its value because of itslcation where both Harajuku Station andMeijij .inguTfaeE' Subway Station is situated less thanf ifty feet from the subject site.

The impetus of Tokyo lympic in 19C64 which tookplace in the town of Haraiuku led to the gradualCommercial developments of Harajuku in the late60s and early '70s. The continuous commercial

developments in HarajukuL in the '70's hasgradually changed the zoning restrictions on thisSite. Originally this site was zoned forresidenti al uses however was changed to allowfor the development of retail complex, asproposed in this project.

Toda. Omotesando Street is often called ChampsElysees of Tokyo. It has earned this nameprimarily since chic boutiques, luxurycondominiums, chic restaurants and coffee shopssprouted along this street as well as along theinterconnecting streets of Medidori Street andAoyamodori Street.

I. SUMMARY OF CONCLUSIONS AND RECOMMENDATION

Findings contained in this report arecapsulized in the following paragraphs.

I. We have found strong evidence indicating asizable opportunity area for festive foodand retail complex in Harajuku. Interestin the development of retail complex ofthis nature has been encouraging. Based onthe results of our survey of visitingpopulations of all age brackets, we see agross sales of about $550 per square footon our first year estimate.

2. The subject property, located in districtone of Harajuku, is in a positiornto takemost of this potential up to the limits ofthe site itself. In order to do this,however, it will be necessary that:

A. The retail space be of exceptionallyhigh design by incorporating andcoordinating a small symbolic signs suchas the cricket, fish, pigs etc... overthe front door of each relevant stores.Highly sensitive and fashion orientedconsumers will demand this to a greaterdegree t-an lessees.

B. That aggressive marketing begin as soonas possible, as other well establishedshopping mall in.Harajuku could imitatethe concept and provide competition. Itshould be noted,. however, that this sitehas an inherent locational advantage inHarajuku than any of the establishedshopping mall, for development of thisnature.

An acceptable range of average salesprice per transaction, based on the averagedisposable income and monthly allowances ofthe consumers would be from $2.00* to$15.00 per transaction with the non-fooditem at the higher end of the range.

4. The potential seen for this project isbased on a nearly complete domination ofthe market-for fast foods, snacks andethnic foods and not upon thegeneral market conditions.

5. The floor layCut must be designed flexiblyto accomodate:

A. The changes in the nature of businessdue to high turnover rates of tenants(ie. retail, fast foods, restaurantsetc.)

6. The floor plan must be well thought out toallow for the disparities of interests andspending habits between the two distinctgroup of consumers.

* All currency conversion in this5 study is based on1,00 =250 yen.

2

II. GROWTH TRENDS IN HARAJUKU

The town of Harajuku experienced over 150%growth rate in its day time population from1970 to 1980. Like most towns of similar sizein Tokyo, all of this growth occured as aresult of the increase in suburban visitors,while the visitors from the central city grewonly slightly. The table below illustratesthe substantial rise in the visitingpopulation in each of the most popular shoppingtowns in Tokyo.

TABLE 1: PASSENGER COUNTS OF HARAJUKU AND FIVE MAJOR STATIONS3BETWEEN 1976 - 1980.

TOWNS 1976 1980 /% CHANGE

TOKYOSHINJUKUHARAJUKUSHIBUYAI KEBUKUROUENO

277,064,930488, 558 34037,196,420

244, 366, 040332 414,990125., 737 ,390

249,730 ,080461,03 2,23040,969,790

245, 682 230333,. 67 640117,566,500

SOURCE: JAPAN NATIONAL RAILROAD.

3

-9.86-5.6310. 140.540.29

-6.49

Although the compounded annual growth rateduring the 70's compares favorably with thatof other major railroad stations in Tokyo, allindications are that the rate of growth hasincreased during the early 80's and is notdecelarating. Passenger count estimatesfor the years following the last censusindicate growth of 42,250,000 in 1981;43, 500, 000 in 1982; and 44, 800, 000 during1983.

CHART I: CAPTURE RATE OF EIGHT MOST POPULAR SHOPPING TOWNS.

Shibuya 25.0%

Harajuku 21.0%Shinjuku 16.0%

- IGinza 6.0%Ikebukuro 5.0%

-Ueno 5.0%Kichijoji 4.0%Yokohama 4.0%Others 14.0%

SOURCE: NOMURA DISPLAY COMPANY, LTD.

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III. fANLYSIS OF SUBJECT SITEL LQCATION ANDENVIRONS.

The parcel under consideration for developmentlies in the western part of Harajuku. Itcontains a total of 1,160 square meters or about12,500 square feet. It is at fifty feet adjacentfrom Japan National Railroad's Harajuku Stationand eighty feet from Chiyoda Subway's MeijiJingumae Station. The property's frontage of 43meters or approximately 141 feet frontage isfacing a four lane traffic artery.

The southern part of Harajuku was first to bedeveloped as an extension of activity of theOlympic Stadiums in late 60's. Luxury mid-rise residential condominiums, commercial officesand a good deal of retailing still exist alongthis corridor. Although it served as a sort ofdowntown Harajuku, this area was never wellorganized for that role, and it presently iscentral to only a fraction of Harajuku'sresidential population and visiting populati.on.

Development gradually spread eastward and acommercial and retailing center called the PalaisFrance evolved in the intersection of east sideof Takeshita Street and Meiji-dori Street.

Palais France Shopping Center, a mid-sized-vertical shopping center with brand name storessuch as Gucci, Yves Saint-Laurant,Nina Ricci etc... served as the focalpoint for this area. However, as thehigh end retail stores were developed in theneighboring town of Aoyama, it too lost itscentrality to the major portion of Harajuku'svisiting population.

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Most recent growth has taken place primarily in

the central portions of Harajuku. Commercial

development in this area has centered around 250

Feet from the subject site. This indoor vertical

mid-sized mall called La Foret containsapproximately 80,000 square feet of retailingspace and presently the largest shopping center

in Harajuku. Strip commercial development has

also occured along Takeshita Street with

international and domestic chain stores such as

Baskin Robbins Ice Cream Store, MacDonalds

Hamburger, First Kitchen Hamburger, D'Lites

boutique and hosts of boutiques, restaurants,and snack stores serving crepes has popped upalong this street in a relatively short period oftime span, two to three years in the mid 70's.

The subject site sits at a strategic positionbetween the location favored by the teens and the

young urban professionals. This strategiclocation is advantageous since it serves as acrossroad to both types of consumers, as aresult, it allows more exposure and visibility toa larger volume of the visiting population.

The advantages of its location also include its

proximity to Meiji Shrine, immediate access to

Harajuku Station and Meiji Jingumae Station, and

its exposure on major arteries of OmotesandoStreet and Ekimaedori Street. Thecharacteristics of the neighborhood and theexpansion of the existing retail outlets and newdevelopments of various retail stores in Harajukufully justify the development of the Markke Place

as planned.

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56 The Spaghetti Factory Aoyama. V It mustbe the variety that entices the large numbersthat gather here-there are 80 different kindsof pasta. The portions don't amount to muchmore than a snack, so if you're hungry youmay want to order 2 dishes and/or a saladwith spicy dressing. Always crowded. Opendaily 11:30am-9:45pm. 3-2-7MinamiAoyama,Minato-ku. 405-4623.

57 China Doll. - *X* M The original Frenchfid,Chinese restaurant. The food and theatmosphere alike are Westernized. The placeto go if you're looking for Chinese food thatgoes well with wine. Neo-Chinese. Open daily11:30am- 1 1:30pm. 2-27-19 Minami Aoyama,Minato-ku. 479-0201.

58 Killer Street. Fashion designer JunkoKoshlno named this street lined with fashionboutiques. Aoyama Street divides it into northand south sides. The south side leads toAayama Cemetery and Nishi Azabu; thenorth takes you to Victor Studios and theNational Stadium. In the middle is theAoyama Street crossing, where you find aWestern-style clothing shop, Teilen Men'sShop, and across from it the fashion building,Bell Commons. Up the north side of thestreet are Nicole, Bally, Stockman and othershops well watched by stylists. YaamotoKansa's boutique is around the left-handcorner just before Victor Studios. On thesouth side is the ski wear shop Ski ShopJire. The sycamore trees lining the streetadd to the fine window shopping.

59 Aoyama Bell Commons. This popularmeeting place attracts many people with itsvariety of goods and services. Firmlyestablished as a fashion center, there arealso aerobics and tennis instruction gyms,and several restaurants and cafes. If you'rehungry, don't miss Sushise. Understandablycrowded, it offers excellent sushi at veryreasonable prices. Branches in Roppongiand NY. 2-14-6 Kita Aoyama, Minato-ku.475-8111.

60 Hamilton Shirt Boutique. Here are 3 floorsof exquisite shirts. The 1st floor features IsseyMiyake shirts, the 2nd floor carries RalphLauren's polo shirts, and the 3rd Hamiltonshirts. The Hamilton boutique features largesizes and the clerks speak some English.Open Tu-Su 11am -7:30pm. Closed M. 3-2-5Kita Aoyama, Minato-ku. 475-1971.

61 Amblente Aoyama's scattered mannerof displaying Italian designer furniture givesthe impression that the casual purchaseris welcome-a look at the price tags willdispel this illusion. Patronized primarily byarchitecture and design professionals, thestore's displays are designed for efficientviewing, not for creating a luxurious moodby setting up designer rooms. Special ordersare accepted; small interior accessories arealso stocked. Open M-Sa 9:30am-6:30pm.Closed Su. 3-1-30 Minami Aoyama, Minato-ku. 405-6720.

62 Comme Ca Du Mode. Simple fashiondesigns in basic colors-black, gray andnavy blue. The main shop is separated intoladies' (1st floor) and men's (2nd floor). Openlate for leisurely shopping. Open M-Sanoon-11pm, Su and holidays 11am-Bpm.3-1-30 Jingumae, Shibuya-ku. 478-6761.

63 Barbliche. Big's top quality men's label.Barbiche. is heavily influenced by US '40sfashion. This men's fashion line changesseasonall" in style and use of fabric. Stopoutside tha comprehensive window displayfor ideas 3n coordinating-then step rightin. Highly recommended for young, fashion-conscious men. Open daily lami-pm. 3-1-28Jingumae, Shibuya-ku. 404-8757.

64 Le Chinois. * )M M Le Chinois servesCantonese- and Szechuan-style dishesslightly modified for the Japanese palate.The interior is a modem mix of art decomirrors and marble. The excellent serviceis comparable with NY's most fashionablerestaurants. Open M-Sa 6pm-2am, Su andholidays 6pm-midnight. Reservationsrequired. Basement 1, Bianca Bldg, 3-1-26Jingumae. Shibuya-ku. 403-3929.

65Boutique Nicole. A pioneer in designerfashions in Japan, much like Bigi, thisboutique is masterminded by MitsuhiroMatsuda, known in NY for his Matsuda label.He even has his own boutique on MadisonAvenue. A visit here is a must for thoseinterested in keeping up with Tokyo fashions.Open daily 11 am-8pm. 1st-2nd floors, NicoleBldg, 3-1-25 Jingumae, Shibuya-ku. 478-099.

66 Zipper. This shoe store prides itself on itshealthy export business to Los Angeles,but to wear these shoes you have to fallwithin the Japanese norm of men's sizes6 through 9% or ladies' sizes 5 through7. Though perhaps short-sighted, thecompany feels that the small number of salesof larger sizes doesn't merit producing them.The good news is that the cuts and designsare fairly irregular, so if you're close to oneof these sizes, you may still be able to findsomething that fits. Open daily noon-Opm.2-17-76 Kts Aoyama, Minato-ku. 4 78-2644.

B ALL67Balil Shop. Distributed as Complements

brand in the US, Marithe and FrancoisGirbaud's designer clothing is available forless under the local labels of Ball and Closed.The entire stock is imported from Italy. Opendaily 11am-8pm. Closed 2nd and 3rd W ofthe month. 3-42-2 Jingumae, Shibuya-ku.478-2049.

68 Galerie Watari. Next door to On Sundaysand sharing the same owner, this gallerydeals mainly in modem art, drawings andphotographs, and makes a point ofpresenting little-known foreign artists. Theworks of Andy Warhtol, Yosef Boyes andNam June Palk have also passed throughthis gallery, and young Keith Haring wasfirst introduced in Japan here. Open M-Sa11am-7pm. Closed Su, holidays. 3-7-6Jingumae, Shibuya-ku. 405-7005.

690n Sundays is, bar none, the bookshop forcreative artists in Tokyo. Unlike stores withan ordinary stock of architecture and filmbooks, this place stocks 4,000 to 5,000different art postcards at any given time,as well as a good variety of magazines andnewspapers from around the world. OpenTu-Su 11am-10pm. Closed M. 3-7-6Jingumae, Shibuya-ku. 478-08091470-1424.

70 Korean Barbecue Dalichi Jlngu.X k( Though not usually considered hautecuisine, Korean barbecue is your best betin Japan for inexpensive beef. The onlyKorean barbecue to serve tenderloin cuts,Daiichi Jingu's fare competes admirably withits fashionable culinary neighbors in Aoyama.Cook the marinated meat on a brazier atyour table and try an order of Korean saladwith soya dressing. Highly recommendedare the kalbi and barbecued liver. Beer isserved in small bottles to save it from goingflat. Open M-Sa 5pm-3am; Su, holidays 5pm-midnight. Reservations required. 3-41-8Jingumae, Shibuya-ku. 401-9146.

71Tower House. (1967) Designed byTakamltsu Azuma as his own residence.In the expensive Galenmee area, this houseis located on a 213-square-foot (19.8-square-meter) site with a ground floor area t 127square feet (11.88 square meters). Althoughit's small, the house's 5 floors makemaximum use of the limited site area, andits stepped construction allows as muchnatural light as possible to enter. The innerand outer walls are of bare concrete. Thishouse is one solution to the diverse problemsof needing to live close to the center of a

city with astronomical land prices. Pnvateresidence. 3-39-4 Jingumae, Shibuya-ku.

72 Basso. Featuring the styles of the '50s and'60s, this women's boutique gave birth tomany modern trends. Teenagers will alsofind prices and fashions to fit. Affiliated shopsinclude Dep't for second-hand clothes,Shabby Genteel for interior goods, and therestaruant/club Pithecanthropus Erectus.Open Tu-Sa noon-8pm, Su 1-6pm. ClosedM. 3-7-4 Jingumae, Shibuya-ku. 475-0868.

73 Halles Capone. The Tokyo version ofMarithe and Francois Girbaud's HaliesCapon. in Paris. Their entire line of jeansfor the 'SOS is on display here. Open daily11am-8pm. Closed 2nd and 3rd W of themonth 2-5-8 Jingumae, Shibuya-ku.470-7762.

74 La Patata. 2 V 6 La Patata is Italian for thepotato, and this cafe offers simple, elegantItalian cooking in an at-home atmosphere.The grilled fresh fish is the number onerecommendation. italian. Open Tu-Su noon-2pm 6-17 :30pm. Closed M. 1st floor,Shiobara Gaien Bldg. 2.19.11 Jingumae,Shibuya-ku 403-9664

75 Margaret Howell, designer of men's shirts,made her debut at Brown's in London,Marcel Lasance in Paris, and Maxfield Bluein Los Angeles. The Tokyo shop caters toboth men and women. Open daily 1lam-8pm.3-34-10 Jingumae, Shibuys-ku. 497-9681.

7634 Square. The Last Road runs betweenAoyama and Harajuku, and is one of themost recent targets for development in thisfashion-conscious area. 34 Square, opened3 years ago, is one of the original boutiquebuildings on Last Road. Only 5 shops arelocated in this building, each of them witha distinct personality. One of them, Crafts-manship, sells original eyeglasses and issaid to be the shop where the late JohnLennon acquired his favorite pair. Theirglasses may seem tasteless or chic, -depending on your outlook, but the numberof faithful patrons attests to their success.Open Th-Tu noon-8pm. Closed W 3-34-8Jingumae, Shibuya-ku. 475-0795.

77Night Bar. M V This restaurant's interior,designed by Masami Matsui, is as fashion-able as its address. In spite of its name andwide selection of cocktails, aperitifs andcognac digestifs, you must eat if you wishto drink here. The tempting Mediterraneanseafood available here makes this a delightfulProposition. Open daily 7prn-3am. ClOsed 2ndSu of month. Basement 1, Heshi Bldf,3-34-5 Jingumae Shibuya-ku. 470-0373.

14

Is Tube. A good place to find a one-of-a-kindknit item-everything is handmade. Whilenot unusual in a Western capital, this turnaway from mass production is rare in Tokyo.Tube seems to have its hands full withlocal orders, so they do not respond veryquickly to orders from abroad. Open M-Sa10am-6pm. Closed 3rd Se of month, Su,holidays. 3-31-20 Jingumee, Shibuya-ku.402-4404.

79 Momineki House. ki This natural foodrestaurant gets its fish and vegetables directlyfrom Saitama Prefecture. Natural food usuallyimplies an emphasis on nutrition over taste.but Mominoki pleases the palate as well.A wide range of healthy taste treats isavailable. Open M-Se 11am-11pm. ClosedSu. 1st floor, YOU Bldg, 2-18-5 JingumaeShibuya-ku. 405-9144.

so Ghee. --- *r V Seating 20 people in as manysquare meters, this cozy restaurant servesa wide variety of curries. The chef, educatedin London, pays special attention tovegetarians. Take-out is available. Open M-Sa noon-2pm, 6-10Opm. Closed Su, holidays.1st floor, Fudo Bldg, 2-18-7 Jingumae'Shibuya-ku. 401-4023.

81 Boutique Kansal International. YamamotoKansal's innovative and creative designshave won him great acclaim both in Japanand abroad. One of the vanguard ofJapanese designers who use traditionalmotifs, his fashion shows at the NationalSports Hall attract a host of celebrities, bothin the audience and on the catwalk. NagisaOshima, director of Merry Christmas Mr.Lawrence, graced the ramp in a recent show.The boutique stocks an extensive collectionfor both men and women. Open daily11am-8pm. 3-28-7 Jingumae, Shibuya-ku.478-1958.

82 Vino a Pasta. - ) V Wine and pasta... anda cheerful place to partake of them.Homemade handcut pasta is a rarity inTokyo, but here they serve nothing but. Thisand antipasto and pasta combinations area good bet. Open M-Sa 11:50am-2pm,5:30-9:40pm. Closed Su, holidays. 3-27-75Jingumae, Shibuya-ku. 478-0417.

83 Cul de Sac. * * 411 Cul de Sac's subduedlighting, soothing background music andleafy interior create an inviting, intimateatmosphere aided by friendly and efficientservice. Standard cocktails and dainty foodin low-key, well-coordinated cafe-bar style.One of the original establishments of thistype in the neighborhood, they seem to addto the menu every time you visit. Open daily6pm-lam. 1st floor, Villa Gloria, 2-31-7Jingumae, Shibuya-ku. 478-2631.

63 Bar Radio. - - * V V With interior designby Takashi Sugimoto and a rusted iron wal!sculpture by Isamu Wakabayashi, Bar Radiois the haunt of young designers and othercreative types. They don't come for theenvironment alone-the bartender is justlyfamous for his talents. After the 9 seats atthe bar are filled, the latecomers are contentto stand and participate in the informal salon.Open M-Sa 7pm-2am. Closed Su, holidays.Basement 1, Villa Gloria, 2-31-7 Jingumae,Shibuya-ku. 405-5490.

64 Plithecanthropus Erectus. MM %The firstbasement is a bar, go down another flightand you'll find a bar, restaurant and space forlive performances. This unusually spaciousclub features experimental artists andperformers and a number of untried,unproven and unknown modern musicgroups, all in a spirit of fun for the fashionableset. Restaurant serves Japanese food. OpenM-F 7pm-2am, So till 4am. Closed Su.Basement 1, Vile Bianca, 2-33-12 Jingumae..Sibuya-ku. 423-2491.

85 Rise Bar - W V V Done up entirely in pink,Rise is a modern bar with a few nostalgictouches. The latest in music is coordinatedwith videos shown on the 4-foot screen, andthe reasonably priced menu includes suchold favorites as Akadama port wine andgrilled octopus. Open M-Th 8pm-4am; F, Sell 5am; Su, holidays tll 2am. No. 8, 3rd floor,

Barbizon Bldg, 2-1-8 Sendagaya, Shibuya-ku. 405-4392.

86GA Gallery. (1983) This building is thegallery for the brilliantly produced inter-national architectural magazine A.D.A.EDITA. Designed by owner Yukio Futagawaalong with Makoto Suzuki, each room inthis small. bare concrete building is unique.Natural light enters via a number ofstrategically placed slits. It features a goodselection of architecture magazines and agallery. 3-12-14 Sendagaya, Shibuya-ku.

87 National Noh Theater. (1983) The largeblack root of this building immediatelycatches the eye The effective combinationof modern and traditional Japanesearchitecture by designer Hiroshi 0. hasresulted in a fitting scene for this traditionalart. Ample use of wood, especially themassive wooden columns and beams, lendsa sturdy. solid feeling. The stage still givesoff the fragrance of new cypress. This isa setting that will surely get better and betterwith age, as the spirit and mystery of Nohare absorbed. Call for schedule ofperformances. 4-18-1 Sendagaya, Shibuya-ku. 423-1331.

so Seems offers coordinates of G. Armani.jackets and ties, shirts by Stephen Bros.and Bagutta, and jeans by Uberto and SanFrancisco for the fashion-conscious youngman. A complete outfit is expensive. Theshop offers a nice overview of Tokyo fashion.Open daily 11awn-@m. Nun Harajuku Bldg,3-24-7 Jingumae, Shuya-ku. 470-3947.

89 Tompo.*t * / MV Just a few years ago, 3sisters from Beijing arrived here in theirmother's home bountry and opened thisrestaurant. Tompo has only 10 seats, butthe food is unique, the price quite appealingand the volume hard to beat. The tofu andtomato stir fry is a rare treat and you get15 tasty morsels if you order pot-stickersin soup. The hearty lunch special is quitepopular. Mandarin. Open daily 11:30am-2pm,611pm. Closed 1st and 3rd Su of month.3-24-9 Jingumae, Shibuya-ku. 405-9944.

90 Psals France. Located on the corer ofMeiji-dori and Takeshita-dori, Harajuku'steenage-fashion streets, Palais Francehouses 34 boutiques stocking a wide rangeof chic fashions and perfumes. Built in 1974when Harajuku had a more mature clientele,it has. survived the teenagers' onslaughtadmirably. Cafe Royal, on the 1st flooroverlooking the street, evokes a Parisianambience. Restaurants are located in thebasement and boutiques on the 1st to 4thfloors. Mamu on the 3rd floor offers a widerange of German-made bedding and quilts.Open F-W, boudques 11am-Opm, Cafe Royal9eam-1C@m, restaurants 1lam-1Cpm. ClosedTh. 1-6-1 Jingumae, Shibuya-ku. 405-6151.

$ Takeahita Street. This long, narrow street,passing from the Yamanote Line's HarajukuStation to Meiji-dori, is worshiped as thebirthplace of young fashion and is a meccafor young men and women from all overJapan. Some come from as far away asOsaka or Hokkaido just for the day and onweekends it's very crowded. The manyclothing and accessory boutiques allemphasize new ideas along with inexpensiveprices. Incredibly crowded in the daytime,by 9pm all the shops are closed and theplace seems deserted. Fashion magazinesoften come here searching for models, andto report on the various boutiques.

92 Last Scene. Managed directly by a smallmanufacturer, this boutique offers the latestfashions at reasonable prices. Unlike manyof the other shops and boutiques liningTakeshita-dori, Last Scene aims to providedesigner quality at street prices. Open daily11am-.m. 1-16-7 Jingumae, Shibuya-ku.478-5130.

93 At Gallery. Showcasing young Japaneseartists, this shop provides free space for10-day exhibitions; both Katsuhiko Hibinoand Akihiko Koseki have had debut showshere. A catalog of At Gallery artists andtheir work is published annually. Recom-mended for all art fans. Admission charge.Open M-Sa noon-7pm. Closed Su, holidays.2nd floor, Okura Bldg, 1-22-1 Jingumae,Shibuya-ku. 401-3189.

94 Harajuku Station. (1924) In the old days.train stations were built to reflect local flavorand pride. Only a few of these old-stylestations remain in the Tokyo area, and thisis one of them. Built in the Taisho period.the wooden architecture is European-styleThe left and right sides of the building arenot the same size; other old-fashionedfeatures include a number of pillars on theinside and a fancy tower-like structure onthe roof. 1-18-20 Jingumae, Shibuya-ku.

95 Jurgen Lehi (Harajuku Branch). JurgenLehl has lived in Japan for only a decadeand a half, actively reviving many losttraditions of Japanese clothing styles whichhave strongly influenced his fabrics anddesign. Lehl, onginally a textile designer,acts as both brand director and designer,overseeing the total operation from his studioin a waterfront warehouse. This boutiquestocks his ladies' collection and accessones,and also Tint brand interior fabrics. Opendaily noon-8pm. 1-13-18Jingumae, Shibuya-ku. 405-9737.

96 Hobby Sakura. Unlike its fashion-consciousneighbors on Omotesando-dori, HobbySakura specializes in toy models and radioparts. When it opened 30 years ago, itbecame popular with foreigners because itwas near the old US Army residential quarters(Green Heights-now Yoyogi OlympicStadium). Open Tu-Su 1 lam-8pm. ClosedM. 1-13-13 Jingumee, Shibuya-ku. 470-6588.

97 Studio V. Yusuke Suga's Studio V Salonin NY, frequented by many celebrities, nowenjoys considerable prestige. His Tokyobranch has won the esteem of the fashionelite, especially for the aftercat hair designin which clients may participate. Studio VCoffee and Snack Shop offers salads, teas,coffees and other drinks. A small flower shopadjoins the entrance. Open daily 1 lam-8pm.6-31-1i Jingumae, Shibuya-ku. 406-3747.

15

90 Laforet. Located in Harajuku, Tokyo'sfashion center, this building contains aseemingly endless number of boutiques.These stores sell copies as well as originals,so the prices vary considerably. The clienteleis generally younger than at Parco's andmerchandise is more or less geared in thatdirection. Events are held at the 5th-floorLaforet Museum. Boutiques open daily11am-8pm, restaurants and cofee shop open1lam-10pm. 1-11-6 Jingumae, Shibuya-ku.475-0411.

99 Ota Memorial Museum of Art. This jewelof a small private art museum featuresrotating exhibits from its fascinating collectionof traditional Japanese prints. Colors usedin such works were commonly obtained fromnatural sources and are often faded, but thiscollection retains its original pristine beauty.A stone garden and bamboo benches in thecenter of the building tempt the wearyconnoisseur. There's also a nice restaurantin the basement. Recommended. Locatedbehind the Harajuku Laforet building.Admission charge. Open Tu-Su10:30am-5:30pm. Closed M and from 25thto end of each month. 1-10-10 Jingumae,Shibuya-ku. 403-0880-

CASA MOZART100 Casa Mozart.** V The 1st floor is a cafe-

salon, the 2nd floor houses a collection ofMozart memorabilia, the 3rd floor is desig-nated Mozart Hall; if you're not a Mozartfan you don't belong here. Open dailynoon-9pm year-round. 1-10-23 Jingumae,Shibuya-ku. 403-1756.

101 Saahu. Managed by Saburo Watanabe,Sashu is one of Tokyo's top commercialbeauty salons, located in a warehouse inthe fashionable Jingumae area. Largeskylights fill this spacious studio with naturalwarmth, highlighting the ikebana (flowerarrangement) artfully arranged throughout.Foreigners get a discount. Open W-M11am-8pm. Closed Tu. Basement 1, LionBldg, 1-9-13 Jingumae, Shiuyaku. 404-7892.

102 Copen.* Mi A marriage between East andWest, this is a cross between a sushi shopand a sandwich place. Fish and vegetablesare sandwiched between bread and dippedin soy sauce. Euro-Japanesque. Open dailyM, Tu, Th-Sa 11:45am-9:30pm; Su, holidays11:45am-7:30pm. 4-32-13 Jingumae,Shibuya-ku. 470-3101.

103 Obscure Desire of Bourgeoisie. ovewCoicept designs by Harajuku veteran HItomiOkawa. Reflecting the image of Londonstreet fashion when taken as a whole, theindividual pieces are quite versatile asadditions to an avant-garde wardrobe. OpenM-Sa noon4pm. CbsedSu, hodys. 6-10-12Jingumae, Shibuya-ku. 409-2674.

104 Mounkberry's * h M In the 1st basementyou'll find a wine bar with 50 labels to choosefrom; the 2nd offers a private dance floorfor members only. The crowd tends to befashion designers and photographers. Dancemusic caters to the modem tastes of thewine bar crowd. Wine bar. Open M-Sa6pm-2am; downstairs open M-F 8pm-3am,Sa till 4am. Closed Su. Basements 1-2 Dai-Ichi Chisan Bldg, 6-12-15 Jingumae, Shiuye-ku. 409-119 1.

105 Sambista. M ) The tropical mood of thisrestaurant/club is enhanced by liveperformances by local reggae, salsa andtango groups. South/Central American menuin a very informal atmosphere. Open daily7pm-2am. 1st floor, 4-30-2 Jingumae,Shibuya-ku. 401-9237.

16

106 Goro's. The handmade crafts sold in thisshop utilize skills that the owner, GoroTakahashi, picked up when living withAmerican Indians. With the loving attentionhe devotes to his handbags and turquoisejewelry, he conveys a rustic beauty not oftenencountered in urban life. The prices arejustified in that all items are handmade. Opendailynoon-pm. 2ndFloor, (eda Bldg, 4-29-4*ngurrae, Shibuya-ku. 404-8079.

107 Klddyland. A department store stocked withtoys and hobby accessories from thebasement to the th floor. Specifically, tere'sparty gear, greeting cards and stationery inthe basement; interior design kits andgeneral accessories on the 1st floor;character kits and brand-name goods on the2nd; toys on the 3rd; hobby accessorieson the 4th; games on the 5th. A must fortoy fans into anything from cuddly dolls tothe latest computer and LSI games. Opendaily 10 am-@m. Closed 3rd Tu of the month.6-7-9 Jingumae, Shibuya-ku. 409-3431.

108 Oriental Bazaar. No one can deny that thebig stone Buddha in the entrance exudesan Oriental presence. This antique and curioshop boasts 80 percent foreign customers.Popular purchases include lamp standsmade from Japanese flower vases-thosemade from fine Kutani or Imai pottery canrun quite high. Folding papers, screens,kimono, antique chests and Buddhist figuresare also popular. Half way up Omotesandofrom Harajuku Station, it's the only shop ofits kind in this neighborhood renowned forwindow shopping and people watching.Recommended for tourist items and relativelyinexpensive used kimono. Open F-W9:30am-6:35'm. Closed Th. 5-9-13 Jgumae,Shibuya-ku. 400-3933.

109 Paul Stuart Japan. This is the Tokyo branchof the original Paul Stuart shop on MadisonAvenue and 45th Street in NY. Under alicensing contract, 60 percent of the clothesare Japanese originals. The interior borrowsfrom traditional Japanese themes-take alook at the ceiling, the details on the staircaseand the garden. Open daily 1lam-7pm.Closed 3rd W of the month. Jingumae OtaBklg 5-7-20Jigngmae, Shiuya.ku. 406.8121.

110 Crayon House. Crayon House is one of thelargest stores in Japan for illustrated andchildren's books. Adults are welcome andbrowsing is encouraged. You can also takea break in the coffee shop. Open dailyl1an-8m, year-round. 2nd foor, Ha'ajukuSanku Bldg, 5-7-5 Jigumae, Shibuya-ku.406-6492.

111 Dojunkal Aoyama Apartments. (1925)Except in artisan and merchant row housesin the old Shitamachi area, you rarely seeseveral families living in large collectivehousing buildings. People generally preferseparate dwellings with gardens. The firsttime this old pattern-of upper middle classfamilies maintaining separate houses-began to crumble was in the Taisho periodjust after the turn of the century, when theworking class expanded due to industri-alization. As the suburbs grew, so did thenumbers who refused to commute. The firstreal apartments came with the reconstructionafter the Great Kanto Earthquake in 1923.The rebuilding gave birth to the Dojunkalconstruction organization and th apartmentsthey built were Japan's first introduction tocomfortable European-style collective urbanhousing. Dojunkai put up many apartmenthouses but this Aoyama work is its best.The tree-lined boulevard of Omotesando andmature character of the apartments makefor one of the most beautiful urban sightsin Tokyo. Originally leased, the apartmentsare now sold like condominiums. Anyonewith the opportunity and the money can livehere. But real estate agents may have plansto build a high-rise on the site, so you'dbetter buy soon. Designed by Dojunkaiengineers. 4-12 Jingumae, Shibuya-ku.

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Takeshita Street. This long, narrow streetpassing from the Yamanote Line's HaralukuStation to Meiji-dori, is worshiped as thebirthplace of young fashion and is a meccafor young men and women from all overJapan. Some come from as far away asOsaka or Hokkaido just for the day and onweekends its very crowded. The manyclothing and accessory boutiques alemphasize new ideas along with inexpensiveprices. Incredibly crowded n te daytimeby 9pm all the shops are closed and theplace seems deserted. Fashion magazinesoften come here searching for models. ansto report on the various boutiques.

ILLUSTRATION 9: PHOTOGRAPH OF TAKEShITA STREET

18'

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ILLUSTRATION 10: la.

IV. MARKET ANALYSIS

Our analysis of the market for the festivemarketplace has involved three aspects:1) An extensive examination of the marketconditions; 2) an examination of the supplyof existing retail outlets in the study area;3) an investigation into the announced andplanned developments of major retail facilities.

1. OVERALL MARKET CONDITIONS

Our research found that about 200 wholesaleentities and over 500 retail entities has beenestablished in the study area since 1970.Rentals ranged from $40 per square foot in aless accessible location to over $250 persquare foot in some of the sites with thehighest exposure and accesibility bypedestrians. Location of high exposure andconvenient accessibility by pedestrians suchas the subject site is in the greatest demand.The subject site is the only vacant site inHarajuku for immediate development potential.The table below illustrates the distributionof stores according to each districts(Harajuku is divided into six districts).

TABLE 2 : Distribution of Stores in Harajuku by Districts.

DISTRICTS: 1 2 3 4 5 6

CLASSIFICATIONS:

WHOLESALENUMBER OF WHOLESALE ENTITIES 32 44 40 53 32 63NUMBER OF SALES CLERKS EMPLOYED 461 511 634 350 350 964GROSS SALES ($ IN MILLIONS) 81 58 150 41 41 308RETAILNUMBER OF RETAIL ENTITIES 266 62 85 120 58 150NUMBER SALES CLERKS EMPLOYED 1147 333 567 439 322 1707GROSS SALES ($ IN MILLIONS) 89 11 30 33 20 356

Source: Shibuya City Hall.

20

The survey by Shibuya City Hall of 547non-food retail outlets found an averagesales per square foot of $394, averagesales per employee of $54,320 and averaQesales per non-food retail outlet of$228, 720 per annum. This survey alsofound 38% of the non-food retail outletsin the study area employed only one totwo employees; 37%. employed three to fouremployees and 25% employed four or moreemployees. This survey also found over737. of non-food retail outlets had astore space of slightly less than 530 squarefeet. The tables below tabulates the datacollected on 547 non-food retail outlets inHarajuku.

TABLE 3: Distribution of Stores by Numbers of Employees Basedon 547 Non-Food Retail outlets.

NUMBER OF EMPLOYEES PER STORE NUMBER OF STORES

1 - 2 EMPLOYEES 210- 4 EMPLOYEES 205- 9 EMPLOYEES 99

10 - 19 EMPLOYEES 2520 - 29 EMPLOYEES 430 - 49 EMPLOYEES50 - 99 EMPLOYEES 1OVER 100 EMPLOYEES


21

TABLE 4 : Distribution of Stores by Retail Space.

STORE SEACE IN SQUARE FEET NUMBER OF STORES

215 SF OR LESS215 - 527 SF538 - 1, 066 SF1,5076 - 5,371 SF5,382 - 16, 135 SF16, 145 - 32, 280 SF32,2924 OR OVER

1942051 00

-51 C"7-5


Table 5: Sales Efficiency Data of Food and Non-Food RetailOutlets Combined.

SALES PER WHOLESALE ENTITY

SALES PER RETAIL ENTITY

SALES PER EMPLOYEE OF RETAIL ENTITY

$ 2 360 ,000

$72,3 00

$119 500

Source: Shibuya City Hall

Table 6: Sales Efficiency Data of 547 Non-Food RetailOutlets.

SALE S PER STORE

SALES PER EMPLOYEE

SALES PER SQUARE FOOT

54, 320

$394


22

2. An Examination of the Supply of ExistingRetail Outlets in the Study Area.

There is less of a truly measurbale market forthe festive marketplace than other types ofcommercial developments. One reason for thisis the propensity for consumers' willingnessto travel several hours to get to Harajuku toexperience the festive atmosphere is very highthus defining a clear market boundaries aredifficult. Nevertheless, an ex..aminationo- the inventory of spaces in Harajukuconvertible to a development of similarconcept is worthwhile.

Harajuku did not develop major concentrationsof retail space until well into the 1970's.In fact, the major portion of retail growthappears to have occurred in the last sixyears.

Three primary geographic pressures have beenexerted on the location of retail space:

A. Proximity to Yoyogi Park, Meiji Shrineand Olympic Stadium;

B. Proximity to higher income residentialareas;

C. Proximity to Yoyogi College EntrancePreparation Seminars.

A brief examination of the distribution ofretail spaces in the study area will provide ageographic context for the subject'sdevelopment and render a clearer understandingof the nature of competition as well as thelocational needs of the tenants (see alsotable 2).

23

La Foret is the largest concentration ofretail space in the study area. Itsevolution is a result of the coexistenceof several factors: high incomeresidential sector and the growth invisiting population to Harajuku.

The high concentration of retail space thathas evolved here has led to many of the sameproblems confronting retail tenants in thearea--namely, parking, congestion and higherrentals per square foot. The concentrationmaintains its success as evidenced by thecontinued demand for retail space here; it hasalso created -a huge captive market of daytimeworkers to the surrounding boutiques. Lately,La Foret has lost a good deal of itsfunctionality in accessibility to the entireretail area, as the surrounding boutiques andretail outlets with a more local businessflavor gain their status.

Local boutiques frequently updatestheir products in response to the latestfashions and trends. The design of thefacades and store layouts of these boutiqueschanges frequently to avoid monotony. Thecreation of their image as the trendsetter andits acceptance by consumers will lead to adecline in the importance of this verticalmall can be expected for the future.

Strip developments along TakeshitaStreet has created another major concentrationof boutiques and retail outlets. Thisconcentration is located strategically withrespect to growth in the.northern part ofHarajuku in response to the explosive increasein the visitng population of teenagers.

24

This suffers from intense congestion ofpedestrians which serves as the limittingfactor for any future growth along thisstreet. However, this street continuesto attract more visitors. Perhaps theinnovative and fashionable stores crowdedwith people with lots of interpersonalinteraction taking place seems to be theprimary factor for attracting consumers.Appendix II portrays the street ofTakeshita and three most popular storesalong the street--D'.lites Part I, D'litesPart II and D'lites Part III.

Examination of the inventory yieldedseveral generalizations about the tightsupply of retail space in the study area.

A. The buildings in the study area rarelyhave space available.

B. The frequent conversions from other typesof structures to retail outlets.

C. The frequent utilization of old andmarginal buildings for retail outlets.

D. The frequent utilization of push-carts tosupplement the shortage of retail space.

E. The spillover of residential usage ingeneral retail space.

F. The frequent violation of zoning codes.

The examination does not represent the entireinventory of retail space; however it is arepresentative concentration of retailoutlets which substantiates the points madeabove.

25

3.-An Investigation into the Announced and

Facil1ities.

A primary thrust of our research into thefestive marketplace has been to compile dataon future developments and plans fordevelopments in other most popular shoppingtowns in Tokyo (see chart I). In this way, weare able to predict market conditions underwhich the proposed subject development willenter and operate in the market.

Although other shopping towns in Tokyo willcontinue to develop their own patterns ofretail outlets and malls on their fringes, theinertia of Harajuku--the atmosphere, theenvironment, the existing stores, the peopleand the image--will clearly create a verydifficult process for any competingdevelopments outside of Harajuku to attr.the visiting population of teenagers andourban professionals away From Harajuku.

The sheer image of Harajuku, the strengh ofsubject's location within Harajuku and thenovelty of the festive marketplace within thenovelty of the town itself, serve as theinherent marketability and will capture thegrowing visitng population of teens, youngurban professionals and tourists intoHarajuku.

26

V. SURVEY OF CONSUMERS

The market for festive food complex has notyet been established. Traditional methods ofmeasuring the demand based on current demandof food items in Harajuku is only a prefaceto a central question of "How many peopleare willing to buy at the marketplace?"-- aquestion which can actually only be answeredby: a) analyzing the consumer profilestatistics; b) studying the consumerbehavioral pattern; c) a direct streetinterviews of the potential customers.

A.A~nalyzing the Consumer FProf il1eStatistics.

HarajukLu cal led the town of "- aih i oninventory" is famous for vrospecialized boutiqueS Carrying impulse goodranging from low to moderatel- y prcornaments, accessories and v . ..h2...i:::..

items.

CHART II: Main Points of Purchase in Clothes.

Brand Name 4.0%In Fashion 7.1%Reasonable Price 8.1%Quality of Clothes 10.1 %Color-Pattern-Design 70.7%

Source: Nomura Display Company, LTD.

27

Approximately 49". of visitors come toHarajuku with their thier ultimatemotive to shop. Pie graph belowdelineates the distribution of thepurpose of their visit to Harajuku.

Chart III: Purpose of Visit to Harajuku.

Shopping Clothes 26.7%Other Shopping 7.9%Window Shopping 13.9%To Take a Walk 13.9%

School/Business 11.9%. Meeting Place 9.9%+ Residing in Harajuku 4.0%

Restaurant Goers 3.0%Others 8.9%


28

The average "pocket money" for men is$77 and $71 for women. The researchalso found that visitors over theweekdays have significantly higherpocket money than visitors over theweekends. The discrepancy between theamount of weekday and weekend isprimarily due to the enormous increaseof low-teens between the age of 14-16visiting Harajuku over the weekendswith their average pocket money of$20. The chart below illustrates thedistributions of visting populationaccording to their spendable pocketmoney.

Chart IV: Distribution of Dispensable Pocket Money.

++Less than $20 20.0%+ $20 - $40 22.0%

$40 - $80 25.0%

$80 - $120 13.0%

.. . $120 -$160 9.0%

K $160 - $200 4.0%

$200 and over 7.0%


29

B.Studying the Consumer BehavioralP;attern.

The majority of the visitingpopulation of Harajuku are from thesuburbs of Tokyo. These visitorsspend over four hours of round-triptravelling time to get to Harajuku.The chart below describes thevisitiors into five categoriesaccording to their frequency of visitto Harajuku.

Chart V: Frequency of Visit to Harajuku.

- ~Everyday 16.3%Once/Twice a Week 20.7%Once/Twice a Month 39.1%Several Times 23.9%


30

Visiting population toHarajuku can be divided into thesegeneral categories: teenagers,tourists, college students, youngurban professionals, and foreignersresiding in Tokyo. Each category tendto have their own distinct walkingcourse.

Teenagers from other towns of Tokyo orsuburbs* have their most favoritestores all set in their minds beforetheir visit. They exit HarajukuStation from Takeshita Exit anddirectly enter Takeshita Street. Theywalk all the way along TakeshitaStreet and on to La Foret viaMeijidori Street. By the time theyreach La Foret, they have already madea decision on what to buy that day.

They trace back their original way tomake a purchase. For these teenagersprefering variety goods of fashionableitems, Takeshita Street is like atreasure box where they will always-enjoy walking no matter how often theyvisit Harajuku. Their walking courseis illustrated below.

Illustration 1i: Typical Shopping Course of TeenagersVisiting Harajuku.

31

Tourists and students on schoolexcursions walk along every singlecommercialized streets of Harajuku.They purchase just about everyproducts that are unique to Harajukuand even paper bags with the logo ofHarajuku. Their walking course isillustrated below.

Illustration 12: Tourist Course in Harajuku.

32

Young urban professionals, collegestudents and foreigners residing inTokyo, who visit Harajuku are thosewho are more fashion oriented than

their peers. Their age range isanywhere between 21 to 35. Their

income is significantly above average

and they are usually from a wealthy

family. They apprpoach Harajuku from

either Harajuku Station's Omotesando

Exit or from the neighboring town of

Aoyama via Omotesando Street. They

mingle at the intersection ofMeijidori Street and Omotesando Street

at chic coffee shops in the area.

Their walking course is illustrated

below.

Illustration13: Typical Shopping Course of Young Urban

Profeesionals.

33

C. Direct Street Interviews.

Interviews primarily centered around

attitudinal questions to evaluate

their values. Some of the

representative questions posed during

the interviews are as follows;

1. What type of building design

would you like to see in Harajuku?

2. What amenities do you consider

most important to attract you on

this site?

3. What is the degree of importance

of developing a festive marketplace

on this site to further attract

young urban professionals in this

area of Harajuku?

4. Do you (young urbanprofessionals) have anyreservations to mingle with low-

teens and teenagers in Harajuku?

D.Survey Cgonclusion.

Over 98". of the interviewees expressed

interest in the project, however about

31. of young urban professionalspreferred to be somewhat away from the

crowds of low-teens and teenagers.

Our projections for success of the

project rely more heavily on the

result obtained from our direct street

interviews of young urban

professionals, and to a lesser degree

on low-teens and teenagers.

34

V I THE CONCEPT OF FEST IVE MARKETFPLACE I NHARAJWUKU

The marketability of festive marketplacederives from its novelty and the differences

from the traditional vertical shopping mall

that are in existence in Tokyo. Unlike the

typical vertical mall the marketplace will

incorporate the casual atmosphere of Chinese

marketplace, traditional and communal

atmosphere of Japanese festivals and the

marketing concept of Fulton Market and Quincy

Market. This marketplace will re-create the

source of amusements that are present in the

town of Harajuku within the marketplace, with

a touch of foreign flavor.

The essential ingredients in the festive

marketplace concept is to incorporate the

festive, lively and fashionable sense into

the image and the design of the building.

A very sensitive attention to detail is

necessary to a greater degree than a typical

vertical shopping malls in Tokyo. An

explicitly stated orientation to marketplace

must be perceived as an extension to their

walking routes since it is customary in

Harajuku to enjoy walking around the streets

while "munching" and "drinking."

The concept of festive marketplace with an

emphasis in ethnic foods will cut across all

age groups by enventually attracting consumers

in all age groups.

(See Appendix C for schematic designs and Appendix D

for floor layouts).

35

VII. FINANCIAL EVALUATION

36

DATA SUMMARY: HARAJUKU MARKETPLACE

P.G.I. IN YEAR 1:OPER. EXPENSES IN YEAR 1N.O.I. IN YEAR 1:

INITIAL PROJECT COST:EQUITY CONTRIBUTION:

$$$

$$

NUMBER OF MORTGAGES:ORIGINAL MORTGAGE LOAN: (1) $MORTGAGE INTEREST RATE: (1)MORTGAGE TERM: (1)MORTGAGE CONSTANT: (1)

DEPRECIATION METHOD: STRDEPRECIABLE BASIS: $USEFUL LIFE:ORDINARY INCOME TAX RATE:CAPITAL GAINS TAX RATE:

HOLDING PERIOD:RESALE PRICE: $RESALE COMMISSION:

1594125605768940534

2425160399492

12025668

8.00%10 YEARS

.145593

AIGHT LINE202570418 YEARS

50.00%30. 00%

10 YEARS18238452

2.00%

$130.00/SQ. FT. @ 5% GROWTH RATE38.00% OF PGI59.00% OF PGI

83.537% LOAN/VALUE

83.53% BASIS/VALUE

OVERALL RATE AT 8.00%

DESIRED EQ. DISC. RATE: 15.00%

37

MORTGAGE ONE SCHEDULE: HARAJUKU MARKETPLACE

PRINCIPAL:INTEREST RATE:MORTGAGE CONSTANT:

$ 20256688. 00%

.145593

ANN. DEBTSERVICE

29492329492329492329492329492329492329492294923294923294922

2949232

INTEREST= PAYMENT

157072145630133,239119819105285

895467249 9540383404512392

92:.565

PR INC.+ AMORTZ.

137852149293161685175104189638205378222424240885260878282530

2025667

REMAIN.MTG. BAL.

1887816.17385221576837140 17331212095100671778429:3543408282530

DEBT COV.RATIO

3.18913.34853.51603.6918

4.07024.27374. 48744.71174.9473

DEPRECIATION SCHEDULE: HARAJUKU MARKETPLACE

USEFUL LIFE:DEPRECIABLE

DEP. METHOD:

ANNUALS. L.

= DEPREC.

112539112539112539112539112539112539112539112539112539112539

18 YEARSBASIS: $ 2025704

STRAIGHT LINE

ANNUALEXCESS

+ DEPREC.

000

0

00

0

EXCESSCUMUL.

DEPREC.

REMAIN.DEPREC.

BASIS

0 1913165O 18006260 16880870) 15755480 14630080 13504690 12379300 11253910 10128520 900313

1125391 0

YR.

123456789

10 C

YR.

12345678910

ANNUALDEPREC.DEDUCT.

112539112539112539112539112539112539112539112539112539112539

1125391

NET OPERATING INCOME: HARAJUKU MARKETPLACE

OTHER INCOME: 'VACANCY AND BAD DEBT:OPERATING EXPENSES IN YEAR 1:

0% OF PGI3% OF PGI

38% OF PGI

POTENTIALGROSS + OTHER

YR. INCOME INCOME

123456789

10

1594125167383117575231845399193766920345522136280224309423552482473010

0

0000

0

VACANCY& BAD =

DEBT

47824502155272655362581306103764088672937065774190

EFFECTIVEGROSSINCOME

1546301162361617047971790037187953919735162072191217580122845912398820

TOTAL- OPERATING

EXPENSES

605768636056667859701252736314773130811786852376894994939744

NET= OPERATING

INCOME

940534987560

10369381088785114322412003861260405132342513895961459076

39

BEFORE TAX CASH FLOW: HARAJUKU MARKETPLACE

AVERAGE NOI GROWTH RATE:AVERAGE BTCF GROWTH RATE:AVERAGE TAXABLE INCOME GROWTH

S

ti,

ANNUAL- DEBTSERVICE

29492:294923294923294923294923294923294923294923294923294922

AFTER TAX

BEFORE= TAX CASH

FLOW

6456116926:.7742015793862848301905463965482

102850210946731164154

CASH FLOW:

+ PRINC.AMORTZ.

13785214929.161685175104189638205378222424240885260878282530

2025667

5.51%8. 03of%

RATE: 9.89%

- DEPREC. =DEDUCT.

1125391125391125.91125391125391125391125.9112539112539112539

TAXABLEINCOME

670923729391791161856427925400998301

1075366115684812430121334145

1125391

HARAJUKU MARKETPLACE

ORDINARY INCOME TAXAVERAGE BTCF GROWTHAVERAGE ATCF GROWTH

BEFORE TAXYR. CASH FLOW

12

4567B910

645611692637742015793862848301905463965482

102850210946731164154

TAXLIABILITY +

33546236469639558 428214462700499151537683578424621506667072

TAX SAV.OTH. INC.

0O

O

0

0O )0)

TAXCREDIT =+

O)

C)

00

00C:)

AFTER TAXCASH FLOW

310149327942346435365648385601406312427798450078473167497081

40

YR.

1

456789

10

RATE:RATE:RATE:

50. 00%8.03%6.03%

NETOPERATING

INCOME

94053498756(:)10369381088785114322412003861260405132342513895961459076

AFTER TAX REVERSION: HARAJUKU MARKETPLACE

REMAINING DEPREC. BASIS:

CAPITAL GAINS:.x CAPITAL GAINS TAX RATE:

TAX ON CAPITAL GAINS:

EXCESS ALLOW. DEPRECIATION:x ORDINARY INCOME TAX RATE:= TAX ON EXECSS ALLOW. DEPREC:

RESALE PRICE:- RESALE COMMISSION:= NET RESALE PRICE:- OUTSTANDING MTG. BALANCE:= BEFORE TAX REVERSION:- TAXES DUE AT TIME OF SALE:

= AFTER TAX REVERSION:

$ 900312

$ 16573.91030.00%

$ 4972174

$

$

$$$$$$

50. 00%0

18238452364769

178736820

178736824972174

$ 12901508

41

RATES ANALYSIS: HARAJUKU MARKETPLACE

DESIRED EQ. DISC. RATE:EQUITY CONTRIBUTION:A.T. JUST. EQ. CONT.:

CASHRATE OF RETURNB.T. A.T.

1.6161.7341.8571. 9872. 1232.2672.4172.575.7402.914

0.7760.8210.8670.9150.9651.0171.0711.1271.1841.244

INTERNALRATE OF RETURNB.T. A.T.

24. 7315.1302.-9552.2531.9491. 8051.7371.7101.6981.691

16.9743. 8012.1421.5601.2741.1121.0140.9490.9060.879

PAYBACKB.T. A.T.

1.6163. 3505.2077.1949.318

11.58414.00116.57619.31622.230

0.7761.597

4643.80

4.3455.3626.4337.5608.7449.988

RATIO ANALYSIS: HARAJUKU MARKETPLACE

DESIRED EQ. DISC. RATE:INITIAL PROJECT COST: $A.T. JUST. PROJ. VALUE: $

NET WORTHYR. B.T. A.T.

NET PRESENT VALUEB. T. A. T.

COST-BENEFITRATIO

B.T. A.T.

9633723103590901112566011935890127924001369801014655670156685501674003017873680

68710477389833794117385271 029149794981156910514890112624201205695012901510

$$

15.00%399492

5076272

YR.

123456789

1 0

15.00%24251607101940

12

456789

10

653905985186048488830845180484092648362661831370 2826189082095488156850

58450275705950556741 C)5430419529579851642055036156491205347921914676780

22.37522.32422.24922. 15622.05021.93321.80921.68121.55021.418

15.63115.28314.93614.59314.25613.92713. 60613.29612.99612. 7 07

42

V III. APPEND I CE

A. Schematic Design and Tentative FloorPlans.

B. Legal Considerations.C. Image Elements

43

ADDENDUMI

The result of this research of the current markettrends, the pedestrian counts, the transportationlinkages, the automobile traffic counts, locationof the site, the financial analysis, the customersurveys and the surrounding competition allsuppports the implementation of this development.

However,implic:.it

the developer must understand four majorassummntions underlying this study:

1. the development of similarwould not be significant inHar a juku;

marketplacethe town of

2. the economy of Harajuku would remainheal thy;

3. the environment the markftplace is willcontinue to be the center of fashion;

4. consumer preference for the novelty ofa festive marketplace will continue.

In addition to these assumptions, a succesfulimplementation of this project will require the

developer to carefully consider the designelements in order to accomodate the highturnover rates of tenants in Harajuku.

The developer must design the structure to createthe concept of "node" rather than "destination"by establishing an outdoor corridor to encouragethe consumers to walk thru the structure. Thiswill increase the traffic.

appendix: A

45

SCHEMATIC DESIGN

46

.1

INTERIOR VIEW OF OUTDOOR CORRIDOR

47

7 7

7.1

DLCATESSE.N.C

PAT

\ - t

F- T FO SPA

0- 0. SEI- E

oil

TENTATIVE FIRST FLOOR PLAN

48

TENTATIVE SECOND FLOOR PLAN

49

appendix:B

50

1. The land is owned fee simple by thedevlopper.

2. Excepting easements for utilites and sewerw

which do not interfere with construction for

the project as planned what there are no

other easements, encroachments, or rights of

way affecting the use of the subject

property.

3. That the completed project wil be free and

clear of all liens and encumbrances

excepting mortgage loan financing and non-

delinquent property taxes.

51

appendix:C

52

image elements

53

RETAIL SPACE

54

DELICATESSEN

55

J

SUSHI BAR

56

RESTAURANT

57

ico-;. c ~.V .11

PUBLIC LOCKERS59

dp

sep 5 1985

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