There was a time when pop-up leases were only signed by Halloween or Christmas retailers, eager to get into a shopping center for a few weeks during their big selling seasons.
That’s changing, though. Today, a growing number of retailers are signing pop-up leases — short-term retail leases — at shopping centers across the country. It gives these retailers the chance to test store concepts and locations without having to make the financial commitment that comes with long-term leases.
A good example? Shorenstein Properties LLC recently signed a pair of these short-term retail leases at Minneapolis City Center, a 1.5-million-square-foot mixed-use property in downtown Minneapolis.
The Elixery, an artisan cosmetics retailer, and Indulge & Bloom, a floral design and gift store that has already operated in Minneapolis for 15 years.
Ronnie Ragoff, senior vice president at Shorenstein, says that pop-up leases will continue to grow in popularity as more retailers seek less expensive ways to test out unproven products, concepts or locations.
“For us, it’s a way to allow artisans the opportunity to come into a center and show their wares,” Ragoff said. “Some might not have been able to do that in the past. They might not have the money to sign a long-term lease. These short-term leases also provide additional activity in a center that we are trying to transform. It’s an opportunity, too, for our tenants at the center to have exposure to local artisans.”
Liz McLay, principa with McLay Consulting, a consultant for the retail portion of Minneapolis City Center, is working with Shorenstein to help the company determine the best tenant mix for the mixed-use center.
McLay’s work is important because Shorenstein only recently purchased the center. The company is now trying to boost the center’s popularity. One way to do that, of course, is to bring in a diverse mix of retailers.
The short-term leases are part of this strategy.
“It gives retailers an opportunity to dip their toes into a potential market,” McLay said. “It gives them the opportunity to experiment with a new product or store format.”
The Elixery is a good example. The company’s lease at Minneapolis City Center is only for one week. During this time, the company plans to offer a new cosmetics shade that it has been developing. The Elixery will seek feedback on the color, performance and price point of the new product.
When determining which retailers are the right fit for a pop-up lease, McLay and Shorenstein officials will look at a number of factors. McLay says that they’ll first consider retailers’ track records, seeking out retailers with established businesses and strong reputations. Next, they’ll consider the retailers’ product lines. Do they offer something that the Minneapolis downtown community will want?
“People like the opportunity to try something different,” McLay said. “They appreciate it when a center offers something different from the daily routine. The response to these short-term leases has been positive. And from the retailers’ perspective, the short-term leases allow them to get more in touch with their customer base. It’s positive exposure that they might not have otherwise had.”
© 2017 Real Estate Communications Group. Duplication or reproduction of this article not permitted without authorization from the Real Estate Publishing Group. For information on reprint or electronic pdf of this article contact Mark Menzies at 312-644-4610 or email@example.com