Sponsored by Federal Realty:
You’ve got a terrific product – everyone loves it. And, you’ve finally got a critical mass of product. OR, you have a terrific idea, but aren’t sure about signing a long-term lease before you have proof of concept. OR, you love your online business, but you’d like to connect a bit better with your customers and learn more about what they like.
What do these scenarios all have in common? They offer a perfect situation to consider a pop-up. What is a pop-up? It is a temporary retail outlet designed to help you test a concept, meet your customers in person and/or clear out some excess merchandise.
But, finding a good location and a reasonable deal isn’t that easy. Many landlords are skeptical of the benefit of working with someone on a short-term basis and would prefer to focus on long-term tenants. However, the entire retail industry is shifting. The old-school concept of anchor department stores at the mall supporting smaller shops close by is no longer the case. Malls and outdoor shopping destinations are looking for experiential retail, entertainment, local flavor, and unique concepts that will draw customers that are getting used to buying everything online.
In order to shift with the times, clever building owners will embrace pop-ups to create more excitement and attract shoppers. One example is Federal Realty, which has created a streamlined process to get you up and running. From a 24-hour turnaround on the agreement, to a seven-page contract (vs. the classic 26-28 page document) to a robust marketing plan at each property, mutual success is the goal.
Others have designated specific spaces to ALWAYS be temporary so as to keep the property fresh. Look for these in your market, especially in centers where you find like-minded businesses to your own. If a landlord is committed to ease of entry, they will also consider flexible pricing. A local artisan can’t pay the same as a global retailer, and there are benefits for both sides when the building owner isn’t stuck on a rigid rate card.
How do you find the right spot for your pop-up – and make the most of it for your business? Here are some tips to help you navigate the world of commercial real estate.
- Research, look into markets for population and strong demographics that match well with your target customer.
- Whether you are considering a street location, strip center, lifestyle center, or mall, walk around and talk to retailers there to see how they are trending.
- Once you find your desired spot, ask for a “short-form agreement” with the landlord to avoid high legal costs.
- As you negotiate rent, obtain a gross agreement inclusive of all costs including utilities to avoid unknown costs and expenses that throw your budget plan off.
- Ask the landlord for marketing help in the common areas (signage, etc.) as well as presence on their web site and in their social media posts to ensure the center is using all its resources towards your success.
- Ask for a couple of days to set the store up before rent starts so you are not paying rent without sales.
- Check out some of the new online marketplaces for short-term space like The Storefront or Appear Here.
About the Author
Mike Kelleher is Vice President – Specialty Leasing, Retail and Office for Federal Realty Investment Trust. From pop-ups to parking lot promotions, Kelleher works with brands to find the best way to tell their story in non-traditional ways from the short-term leasing of in-line space, sponsorships, corporate partnerships, common area leasing, advertising, and programing. He can be reached at mke[email protected], and you can view his properties here: http://www.federalrealty.com.