By Matthew Hammont, Specialty Leasing Associate
As an ongoing impact of the pandemic, flexibility in lease agreements has become the key to survival for an increasing volume of retailers and shopping centers across the country. While retail sales are expected to continue an upward trajectory for the remainder of the year, many businesses are still in recovery mode and looking to short-term leases or pop-up models as a safety net to launch, relocate or expand their existing footprints.
Across Bayer Properties’ nearly 9-million-plus-square-foot portfolio, we are focused on creating value for our clients through relevant merchandising mixes, and even with short-term deals, our goal is to provide a customized shopping experience that appeals to the communities we serve. Short-term deals not only help drive ancillary income, but they also add energy to otherwise quiet spaces. These types of deals serve to build goodwill within the communities we serve by adding local flavor and enabling centers to bring in offerings that complement existing tenant lineups. In addition, they also allow our leasing team to experiment with new concepts and uses to determine which retailers best resonate with consumers.
Since November 2020, Bayer has signed more than 40 short-term lease agreements, working with tenants across the portfolio to identify opportunities to establish temporary locations. This includes national brands like Lululemon, LensCrafters and See’s Candies, as well as local and regional concepts such as Blue Zone Sports, Luna, Carriage Crossing Nutrition and Cocoa Crush. The short-term lease and pop-up models give operators the ability to test a potential new market without making a long-term commitment.
After many national bankruptcies led to store closings last year, the availability of turn-key retail space is on the rise. Local businesses and mom-and-pop retailers now have more opportunities to sign leases in pre-built spaces, eliminating the largest expense associated with opening a brick-and-mortar store. Especially on the heels of the pandemic, consumers are more prone to support local businesses, and Bayer prides itself on supporting entrepreneurship. Offering turn-key space is also a huge benefit to landlords. By providing move-in ready storefronts for new tenants, landlords do not have to put forth additional capital or work to accommodate specific build-out requests from a tenant.
At The Summit in Birmingham, Alabama, Carriage Crossing in Collierville, Tennessee, and Ashley Park in Newnan, Georgia, we have repurposed existing vacant spaces within the centers (ranging from 1,800 to 4,000 square feet) to incubate a revolving, weekend pop-up shop program. These pop-up shops offer small business owners the opportunity to test out brick-and-mortar operations in a no-strings-attached setting over the course of a five-day term. Just in time for the holiday season, we have several other short-term deals in the works across the portfolio as well.
As we look ahead to how the retail landscape will take shape in the future, we are confident short-term leases are here to stay.