The commercial real estate industry is accustomed to its share of hyperbolic headlines, but amidst all the “retail-is-dead” noise, one thing is certain -- there is more open retail space than usual right now, both in shopping centers and in urban environments.
As a result, owner-developers need to get creative with their spaces in order to sign tenants that can bring customers in the door -- even if those tenants weren’t what the owner originally had in mind.
Here are three out-of-the-box uses for vacant retail space that are catching our eye:
The previous site of a large big box store has the square footage and parking necessary to be a perfect self-storage facility -- as Aston Properties has shown with their redevelopment of a former KMart site into an Extra Self Storage in Monroe, NC.
BisNow reported that the upgrade took 9 months to complete, at the tune of about $1.7M, spent mostly on a new interior and facade. It’s certainly no small investment, but the property now has a massively increased earning potential compared to a vacant shell.
Storage is also an industry that continues to grow in the surroundings of cities that are experiencing housing booms and economic growth.
Even though the idea has been around for a while, pop up shops have become a major option for inline urban locations due to their flexibility.
While the owner doesn’t get the security of a longer-term tenant, an occupied property is a lot more profitable than an empty one. Big brands also understand the benefit of securing short-term prime space to stay top-of-mind with customers -- for example, PepsiCo is opening a Pure Leaf Tea House pop up in Manhattan’s SoHo neighborhood.
Recently, a number of tech startups have also entered the field, trying to facilitate the relationship between landlords and those looking for short-term space -- for instance, Storefront and AppearHere have been battling it out in top markets like London and New York.
Cultural & Event Spaces
This one applies both to urban inline and shopping centers -- no matter where you are, there are always local organizations like theater companies, choirs, and even churches that are in need of space for their activities.
The Galleria Shopping Center in Fort Lauderdale, FL found this out when they decided to rent open space to the Fort Lauderdale Children’s Theatre. Everyone ended up winning -- the Center cleared a vacancy, the Theatre had the space they needed, and overall foot traffic in the site went up.
Clearly, a local non-profit won’t be able to pay the rents of a national chain, but the benefits in terms of marketing, community relations, and overall positive publicity can be worth their weight in gold.