Making The Most of Your Retail Space
The ever-changing retail climate continues to keep landlords and developers looking for more creative ways to adapt. How do we make the most of our retail square footage? Being flexible is the best strategy and the landlords who can adapt the fastest will succeed. Let’s start with some basics and see how creative we can get.
This is a very economical way for a landlord to activate a large space and get the most bang for your buck. Food halls are great example of a master lease. A single operator holds the lease and sublets small spaces to vendors. This is a great opportunity for the vendor. It allows them to grow their brand in a small space with a small rent. These also work very well as an incubator to grow a small business into a larger business. The goal, is that one day this small success will build a customer base large enough to support a move to one of your larger spaces.
Food Halls are also very efficient as far as common area maintenance, marketing and general building operations. Your maintenance staff keeps the general area clean, you have minimal cleaning stations and a single marketing team keeps the doors open for all your vendors.
This concept is also a great model for a retail and soft goods experience. There are so many beautiful products and designers out there but not all these vendors have the capital or inventory to support a free standing shop. As a retail operation you may only need a few sales staff and a well situated cash wrap. This flexible retail space can also incorporate an experiential aspect. Perhaps your plant shop has a succulent bar that enables the consumer to create their own design, or a candle shop that holds candle making classes. Again, so many options to attract consumers and reinvent your retail spaces.
Common Area Leases:
Common area leases are a great way to activate underutilized spaces in your public gathers areas. Take a quiet corner and fill it every weekend with a beautiful flower cart or invite a yoga studio to come in for a morning class. Food carts, coffee kiosks, gelato vendors are just a few creative ideas to utilize common areas. These vendors pay by day, percentage rent or hold a short-term lease. Not only is this a great use of space, but a huge people pleaser that will draw additional morning shoppers and a Saturday and Sunday crowd.
Co-working spaces are as popular as ever, creating multiple opportunities for you. Open up your evening-only restaurants for a daytime co-work space and utilize those quiet booths as private office spaces. Explore businesses that have historically been categorized as non main stream, but are now are in high demand. Add a massage studio, Med Spa or hair and nail salon to your co-work operation. Forward thinking developers are curating their tenant mix to make things more convenient for the hard working folks in their co-work places. Add a craft brew bar to your food and beverage options. Creative minds need a break, provide that and you will keep your co-working desks full.
Building a network of tenants that allow for a shopping experience with staying power is the best way to get most of your retail space. Create a morning coffee and meeting place that is also a favorite midday Pilates studio; take that perfect clothing shop full of beautiful merchandise and add a quick cocktail bar in the center; how about a beer garden that sells your favorite team gear and doggie supplies. These are all experiential shopping adventures with allure and staying power. Some of the most active and high yielding locations in every city are those that keep their consumers busy and engaged.
Do you have a vacant retail space to fill? Pop-up stores are not a new topic, but the trend has picked up great momentum in the last few years. In the past, pop-up shops were Halloween shops that sold costumes seasonally and were undesirable to landlords and developers. Today, the idea of a pop-up creates a good test market opportunity for a brand or retail shop.
These type of shops are also great for e-commerce companies looking to experiment with a retail store without having to make a long term commitment. They offer something new and different and can drive and change traffic.
Create a space that is your designated short term pop-up. White box this space. There are many pop-up search companies that can make leasing your space as easy as renting a hotel room. This trend will keep your retail team busy. We are no longer searching for 10 year leases, and pop-up shops can change every two weeks to every two years.
Creativity, flexibility and an open mind is truly the answer to making the most of your retail spaces. Don’t sell yourself or your customers and tenants short. Consider working with a retail consultant that can help you expand on the great opportunities that make better use of your retail spaces.