Creativity is key to filling hard-to-lease space, panel says
Publish Date: June 11, 2014
The need by many retailers for smaller stores has left some landlords with awkwardly shaped spots to fill, but owners are rising to the challenge, panelists noted at an SCTLive event in Boston this week titled “Solutions for Hard-to-fill Spaces.”
Empty big-boxes and department stores in particular remain a problem. Panelists recommended recruiting nontraditional users such as glow-in-the-dark golfing concept GlowGolf, which is taking over mall anchor spaces and empty big boxes around the U.S., and such swimming-oriented concepts for children as AquaTots Swim Schools and GoldFish Swim School. Such uses may not pay as high rent as the previous tenants, but they can help drive a center’s connection to the community, said Lesley Dokos, retail leasing and development at the Boston office of Edens. “If you’ve got a spot that’s been vacant for years go out into the community and figure out how to turn the lights on,” she said, pointing to an Edens property in West Hartford, Conn., that recently teamed up with local parents to put a teen-friendly hangout in a long-vacant space.
Other panelists included Kenneth Fries, vice president of leasing at Dedham, Mass.–based RK Centers; Douglass E. Karp, executive vice president at Newton, Mass.–based New England Development; and Patrick J. Paladino, Jr., senior vice president of retail at Colliers International’s Boston office.
Local retailers are another good solution, though finding and nurturing good mom-and-pops may require more work than publicly-owned landlords are willing to expend. Moreover, dealing with the inevitable failures that result from experimenting with new concepts and ideas can spook Wall Street investors and institutional lenders, said Colliers’ Paladino. “Sometimes for owners its better to have a vacancy than a loss,” he said. When bringing mom-and-pops into retail centers, Paladino said it’s important to provide short-term leases. “We do short-term leases because we don’t want to set anybody up for failure.” Paladino said it also helps to give first-time retailers a short-form lease so as not to intimidate them with 700 pages of fine print.
Panelists agreed that emergency care medical centers and medical tenants dealing with cosmetics are good solutions for hard-to-fill spaces in retail centers, but call centers and pop-up shops are not. Call centers aren’t taking up as much real estate as some had predicted in recent years, plus they require extra security and don’t draw traffic to a center, panelists said. It’s virtually impossible to attract a pop-up shop to a troubled space, as those tenants always want maximum visibility in prime space, they added.