Mom-and-pop shops are growing again
Publish Date: August 04, 2014
Mom-and-pop chains are finding it easier to grow these days, REIT executives say. At Kimco Realty, small-shop occupancy is expected to hit 90 percent within the next 12 months, due in part to strong leasing from small, independent tenants. “We've shifted our focus to the small shop space because we think that's really a large portion of our growth going forward,” said Conor Flynn, COO, chief investment officer and executive vice president. “It's pretty apparent in our key markets that the mom-and-pop has come back in a major way. Hair salons, nail salons, service-based industries, restaurants, family businesses have all come back to our shopping centers.” Flynn expects small-shop tenant leasing momentum to continue to improve along with the economy and housing market. Small banks, on which many independent tenants rely for funding, are helping fuel growth, said Kimco’s vice chairman, president and CEO David Henry.“The community banking system has recovered fully now and are more aggressive about local lending,” he said.
Equity One saw similar results at its shopping centers during the second quarter, according to president Tom Caputo. “We are very pleased with the pickup in shop leasing particularly in Florida. Overall, shop occupancy during the quarter increased to 120 basis points from 83.6 percent to 84.8 percent, with 80 basis points of the pickup coming from organic lease-up.”
Leasing activity within the firm’s portfolio has been evenly divided between chains and franchisees and mom-and-pops, Caputo said. “It’s almost right down the middle, which I think is fairly encouraging, because what we are seeing is a lot of the mom-and-pops are passing the credit test pretty effectively. Right now, as far as new leases, we are looking at about nine salons, seven restaurants or coffee shops and seven service uses, all new leases executed in the second quarter.”
For more of our reportage on independent retailers and mom-and-pop tenants, read Landlords find ways to help independent tenants succeed, Looking out for the little guy, Helping mom and pop be greener, Fostering mom and pops and Mom and pop restaurants lost.