The recent economic doldrums have fueled at least one cultural and business phenomena: the pop-up store. With retail occupancy rates lagging, pop-ups (or temporary-store space), is a win-win for entrepreneur and landlords alike. Pop-up stores attempt to fill a marketing need or facilitate a product launch, and exist for a short amount of time. The very first pop-up stores centered around seasonal holidays like Christmas and Halloween. But more recently, pop-ups have been used by national “big box” retailers such as Toys R Us to create excitement (and sales) in new areas where they don’t currently have a brick and mortar presence. Even chefs have gotten into the act, temporarily renting existing “dark” restaurant space to promote a new, short-term restaurant concept. The pop-up phenomena is far from a fad, and is being fueled by the recession, a glut of commercial retail space, and a fast-moving internet society with an ever decreasing attention span.
As in all real estate siting, the old adage of “location, location, location” resonates in the pop-up world as well. The current iteration of pop-up stores tend to seek out prime locations near existing magnet retail to generate maximum traffic for the new temporary site. In fact, one company, PopUpInsider, led by an industry pioneer Christina Norsig, provides an on-line exchange to match prospective retailers with commercial landlords. Norsig thinks that the new economy will lead to an even faster cycle of pop-up openings and closings—think “Flash Marketing” where pop-ups exist for days instead of weeks.
South Florida, with its retail magnet areas of Midtown, Design District, South Miami, South Beach, Las Olas and Delray Beach are all well-positioned for the pop-up boom. Not surprisingly, many art and gallery pop-ups have opened during Art Basel’s run on South Beach, and have filled space in Wynwood and the Design District as well as on the beach. Commercial landlords with empty retail space in prime locations should consider making themselves available for pop-up retail. Of course, the devil is in the details, and both landlords and retailers should use well-crafted lease agreements to address everything from liability to fixtures and investment, and the ultimate clean-up of the space when the pop-up’s run is over. For a recent article on the pop-up phenomena and what it means for the future of retail and commercial rentals entitled “Limited Edition Retail” click here.
Author(s): Michael S. Popok
