2013-04-26

Co.Exist

Making Renting A Store As Easy As Booking A Hotel Room

Storefront matches potential short-term leasers with landlords sitting on idle real estate space. In an age of pop-up stores and poor prospects for long-term tenants, could it be a shot in the arm for commercial real estate?

Opening a business can cost a lifetime of savings--$30,000 on average estimates the Kauffman Foundation--and yet only half of them will still be open within five years.

How many more businesses could succeed if entrepreneurs could test out their concepts by slashing one of the major costs of starting a small business: securing a retail space. Yet connecting pop-up buyers and sellers for short-term leases remains cumbersome. If companies now entering the real estate space are successful, renting a temporary store will be almost as easy as booking a hotel room.

PopUpInsider, a matchmaking website for short-term tenants and landlords, is focusing on allowing renters and sellers to find each other and exchange contact information. The London non-profit, 3Space, is taking a charitable approach by locating vacant space to donate social good. Storefront seems to have even grander ambitions by offering a marketplace for short-term retail space that makes renting a store feel like booking an apartment on Airbnb.

Tristan Pollock, co-founder and COO of Storefront, says his company has already booked 450 days for businesses in San Francisco, Oakland, New York City, and Brooklyn and has 400 more spaces indexed to be photographed and put on the site. And they’re just scratching the surface.

"We see the future of retail moving towards temporary and targeted," wrote Pollock by email. "If online is about convenience, then offline is about the experience and being where your customers are."

Signing up with Storefront turns out to be pretty easy. I came a hair’s breadth from renting a spot in Vanderbilt Hall at New York’s Grand Central Terminal for $25,000 a day. (Open spots still on the calendar if you’re interested!) Although I balked when it came to billing my credit card $175,000 for the week (and secure approval from the broker), theoretically it should be little different than booking a flight or a room, with some additional negotiations to close the deal.

The Wall Street Journal reports the trend of large retailers using pop-up spaces to feature designers or new products is moving toward small business owners who want to try out ideas without committing to conventional three- to five-year leases. One New York real estate firm said it was negotiating short-term commercial leases for 30% of its 150 or so small-business clients in 2010, up from 18% over the year before, states the newspaper. It’s good news for property owners as well who once coveted big box retailers and long-term tenants, but see pop-up businesses drawing new crowds, cleaning up vacancies and even making discounted "pop-up" clients into long-term customers within several weeks or months.

Potentially, pop-up stores could also help give physical retailers some of the low-cost agility enjoyed by online sellers such as Amazon (whose success has lead to predictions of the imminent demise of brick-and-mortal retailers). Slate’s Matthew Yglesias argues the Great Recession may have marked a dismal turning point for retailers: mall vacancies remain near pre-recession levels despite an ongoing recovery.

Pollock believes his model will let landlords generate additional income with unused space, while opening up the possibility a store to far more artists, designers and brands who could not (or would not) sign long-term deals in the past.

"Retail is finding new roots through short-term retail," says Pollock. "There’s a renaissance occurring. The urban shopping hubs of the U.S. are transforming. We even saw a pop-up shop opening up in Tulsa yesterday. It’s everywhere."

Add New Comment

5 Comments