• Boston

Pop-Up Retailers Creating Wave of CRE Activity

What do Kanye West, Julian Edelman, and Amazon have in common? They’re all part of the growing trend of short-term, pop-up retail locations in Boston and across the country.

The idea of temporary retail locations is generally traced back to the development of heavily seasonal businesses – such Christmas-themed shops or the wave of Halloween stores found in malls nationwide every fall.

But the idea has gained traction as a much more widespread concept in recent years, with temporary stores lasting anywhere from a few weeks to a few months, fueled by social media networks which make it easier to announce new locations and drive traffic.

Now, the industry website Pop-Up Republic puts the size of the industry at $50 billion.

With the right brand and right messaging, the attention a pop-up can generate is intense, tapping into the trend of “experiential retail” that has become a buzzword in the commercial real estate industry.

“Pop-up shops are really more prevalent than many people realize,” says Emily Ou, a Brokerage Managing Director focused on Retail at Cushman & Wakefield. “People may not even know a location was a pop-up until it leaves.”

While pop-up activity is strongest during the holiday shopping season and warmer summer months, retailers continue to open up short-term locations year-round in both street-level retail and in-line mall settings.

This past summer, a clothing pop-up featuring apparel from musician Kanye West opened on Boylston Street for three days, generating enough hype that people camped out overnight for the chance to buy his merchandise. Other celebrities – such as New England Patriots’ stars Julian Edelman and Martellus Bennett – have also set up temporary retail locations on Boylston Street.

Running apparel company Tracksmith has tapped into local activity in a different way – setting up temporary storefronts near the finish line of the Boston Marathon each of the past two years.

retail

283-285 Newbury Street, Boston

Even large brands are using the idea to test different approaches. Amazon recently launched a retail location in the Natick Mall – called Amazon Bar – where consumers can try out devices such as Amazon’s Echo, Kindle or Fire and purchase accessories and gift cards. In many cases, the differences between pop-ups and traditional retailers aren’t clear to consumers.

While long-term leasing is still the standard, Ou says the pop-up concept provides positive opportunities for both retail tenants and landlords.

The initial commitment to just a short lease allows retailers to either launch a short-term concept or to test out a new market. If successful, the tenant may be able to transition into a long-term tenant in that space, or use that track record to help in securing a long-term lease elsewhere.

Landlords benefit both from the rent payments on otherwise-vacant space, but also from the increased activity and foot traffic in an area.

“Compared to an office building, vacant retail space has a much larger impact on the surrounding properties,” Ou says. “Sales pick up, and leasing out space is that much easier when a street is full.”

Time will tell how the concept will evolve and develop in the future, and whether more and more locations become permanent pop-up incubators, hosting a series of short-term locations.

But within the ever-changing world of retail, pop-ups are definitely here to stay.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

  • Boston

© 2017 Cushman & Wakefield, Inc.