Pushed Into Creativity By The Pandemic

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These days, a heartening sentence with both 'pandemic' and 'retail store' in it is pretty hard to come by. While housing and industrial real estate shone through the lockdowns, retail real estate witnessed its dark moment. 

All's Well That Bends Well

Brick-and-mortar stores were already struggling before Covid, with consumers shifting to online stores in hordes, but that trend accelerated in 2020-21 as lockdowns downed shutters and e-commerce sales soared.

The resulting abundance of retail store vacancies taught landlords to be more flexible. 

From Panic To Being Creative

In order to continue making money from massive retail real estate investments, flexible landlords are deploying various novel techniques to keep out of the red. Here are some cool ones:

🎨 Rents and Leases: After the initial pillow fights with retail brands, landlords have started waiving rents or entering into revenue-sharing agreements. To woo new brands, they are reducing rents, offering free rent periods and agreeing to customize spaces. Landlords are also scaling back lease terms. 

🎨 Display Space: To bring in whatever revenue, some landlords have given storefront windows over to digital advertising. Now companies are bringing interactive ads for movies, automakers and sneaker brands to empty store windows, and landlords are receiving a percentage of the amount charged to advertisers.

🎨 Pop Up Retail: Some landlords are opening their gates to pop-up* retailers, — luxury brands are using temporary stores to kick off collections, e-commerce companies to introduce themselves, and companies of all types like the opportunity to test out a site.

* Pop-up retail, also known as pop-up store or flash retailing, is a trend of opening short-term sales spaces that last for days to weeks before closing down.

While Short Term Creativity Is In Vogue. . .

. . .But ultimately, most landlords engaging in short-term activations hope to lease out their retail real estate to long-term occupiers.