In 2017, the retail industry saw some big changes. Publications were filled with doom-and-gloom headlines about the retail apocalypse. And while brick-and-mortar continues to be a viable sales channel, the shifting landscape has some industry players, particularly commercial real estate owners, trying to figure out how to fill their vacant retail spaces.
Major U.S. chains announced 6,955 store closures in 2017. As traditional retailers shutter, that space is left empty — leaving the owners to find a new tenant. Finding a new long-term tenant can take months or even years, but that mortgage on your space still needs to be paid. Instead of simply searching for a new permanent tenant, you can monetize your empty retail space in the meantime.
Depending on the size, layout and location, you have options to make some cash off your space while waiting for the right tenant. Here, we’ll outline a few of the top options so you can make the right decision for your space.
Use Your Space for Pop-Up Shops
Instead of opting only for long-term retail tenants, commercial space owners can also explore the option of short-term renters. Yes, we’re talking about offering up your space for pop-up shops.
Short-term opportunities, like pop-up shops, can keep your space occupied with retail tenants and keep the foot traffic flowing. But before you finalize your decision to go with pop-up shops in your space, there are tasks you’ll need to take care of to prep your venue for short-term tenants.
“The most important thing for pop-ups is that [tenants] have little to do except for their own installation,” Kia Illulian, president of Illulian Group, advises. “Make sure you have all the bells and whistles available for them.”
Just like with private parties and events, you’ll want to accommodate tenants with the basics like restrooms, Wi-Fi and climate control. To further appeal to brands on the prowl for the right space for temporary activation, you’ll want to ensure yours is neutral to easily assume your renter’s visual identity.
Every renter is going to want a different aesthetic, so if you have a blank slate for brands to work with, you’ll likely attract more bookings.
For commercial space owners who are struggling with the idea of keeping your space blank, David Gomez, president of Fountain Realty Group, has some advice. Gomez, who offers a gorgeous space in New York City’s SoHo neighborhood, says leaning on the solid bones of the space was the key to unlocking pop-up success in his case.
“Letting the space breathe and highlighting its architectural qualities, combined with a leasing team that can turn around agreements quickly,” he says.
Like Gomez, you can get the word out about your space and reach potential renters by listing it on a platform like Storefront.
Need a little more help converting your space so it’s pop-up friendly? Generate more revenue with our guide to prepping your space for short-term rentals >
Rent Out Your Space for Private Events
If your space is in a central area, particularly in an urban core, you can also rent your commercial space for private events. In many bustling cities, there’s a consistent demand for well-appointed venues for parties and events, and commercial space owners can meet that demand.
From fundraisers to art sales to parties to corporate events, property owners can market their space for a variety of purposes. If you decide to go this route, ensure your space can accommodate organizations eager to host an event with things like:
- Working restrooms
- Heating and air conditioning
- Light, especially natural light
As a space for events, you want your venue to be a blank canvas. So, consider painting your walls a shade of white and keeping any decor neutral. It’s also helpful if you can provide catering or bar service recommendations to tenants.
Also strategize which types of events would work best in your space — intimate gatherings, large parties or something in between. For further guidance, check with your local government regarding operation or business licenses and any zoning restrictions.