A quick thought on pop up stores
Pop up stores by national chains is supposedly the latest "phenomenon" in retail. Of course, this has been going on in a smaller scale by small tenants and even national retailers such as Hickory Farms for many years. The leases, being short term, are figured out and conformed and done. But what about the long term?
Some say this trend will continue over the long term. I tend to agree. Unfortunately I think it will depress prices unless lenders and buyers figure out a way to quantify and underwriter the pop ups, or pops enter into long term seasonal leases as a compromise, if landlords are willing to do so (and I would do so if the landlord had a cancellation right if it leases up the rest of the space in the mall -- there are all kinds of legal things we can do!) In a way, it makes a lot of sense. Cut down labor costs and dirt costs, concentrating on the couple of months that matter most.
What do I think might also happen? It will hurt the have nots. Let's face it: everyone wants to be in the major, in demand malls in major markets where your per sf sales are high enough to justify the year round store. But in the have not malls with 20%+ vacanies? You get the picture. And that triggers co-tenancy clauses, and that triggers -- dead malls. So, if you like to go to Water Tower Place or another mall that is basically 100% full, no change. If you go to my local mall (which I don't, by the way)...thjings could be a-changing.
Some say this trend will continue over the long term. I tend to agree. Unfortunately I think it will depress prices unless lenders and buyers figure out a way to quantify and underwriter the pop ups, or pops enter into long term seasonal leases as a compromise, if landlords are willing to do so (and I would do so if the landlord had a cancellation right if it leases up the rest of the space in the mall -- there are all kinds of legal things we can do!) In a way, it makes a lot of sense. Cut down labor costs and dirt costs, concentrating on the couple of months that matter most.
What do I think might also happen? It will hurt the have nots. Let's face it: everyone wants to be in the major, in demand malls in major markets where your per sf sales are high enough to justify the year round store. But in the have not malls with 20%+ vacanies? You get the picture. And that triggers co-tenancy clauses, and that triggers -- dead malls. So, if you like to go to Water Tower Place or another mall that is basically 100% full, no change. If you go to my local mall (which I don't, by the way)...thjings could be a-changing.
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