Pop-up stores are gaining popularity and are here to stay, experts say. Here’s why.
For those who thought the pop-up trend was coming to a close, guess again. Pop-up stores are proliferating in cities across the country, including Miami.
The most popular local pop-up hubs: the Design District, Lincoln Road and Wynwood.
That news comes from a December report Pop-up-a-Palooza! published by Cushman & Wakefield in December. The report studied digital brands that opened for the first time in a bricks-and-mortar space during Halloween, the busiest time of year for pop-ups. In 2019, about 2,500 temporary Halloween stores opened across the country — an 80% increase from 10 years ago, when 1,400 stores opened.
Miami was one of 37 cities listed as a stronghold of activities. New York, Las Vegas and Los Angeles were also on the list.
“Miami over this last cycle changed from a mall-dominant market with Aventura, Dadeland and Bal Harbour, to an urban retail market,” said Frank Begrowicz, a commercial broker with Cushman & Wakefield South Florida. “We are in this interesting time in which digital brands are transitioning to brick-and-mortar stores.”
The practice is a win-win for both landlord and tenant, Begrowicz said.
“It’s a confluence of the times. Who is a credit-worthy tenant anymore? What brands today have been successful for decades? Gap and other brands are struggling,” Begrowicz said. “A short-term lease is proof that the tenant can be successful and that they can sign a long-term lease.”
.jpg)
Such temporary leases are a way for landlords to draw new tenants to areas that have lost their mojo and are making a comeback. Begrowicz said, “Streets that haven’t gotten good press in recent years due to vacancies, like Lincoln Road, owners bring in pop-ups to show that there is a way to justify rates and show that what made Lincoln Road is still there.”
Rates on Lincoln Road fluctuate but range from about $190, according to Begrowicz, up to $250.
For retailers, short-term leases offer a test of whether their products do well in a particular neighborhood and a chance to study their clients’ shopping habits, Begrowicz said: “All of these new retailers are trying to see what is going to work, whether customers are seeing something in store and buying online or seeing something online and buying in the store.”
And sometimes, they may get a discount. Rents range from 30% below long-term rates to 50% above them, according to the report, according to Michael Hinton, the senior associate of investment sales at commercial real estate firm Apex Capital Realty and 2020 CCIM Miami-Dade/Monroe District President. A short-term lease can range from 30 days to 18 months.
Miami Beach and Wynwood have seen an influx of pop-ups since 2018, including Miansai in Miami Beach, Pharrell Williams’ Billionaire Boys Club and the Unicorn Factory in Wynwood.
Said Begrowicz, “We encourage our tenants to try between a year and 18 months because South Florida is still a seasonal market... If a tenant wants to experience the retail market in South Florida they have to test high and low season.”
Pop-up stores will continue to gain popularity in Miami, especially in the weeks ahead, the report predicts.
Miami is most in demand compared to other cities, thanks to the Super Bowl, said Hinton. Prime time: the 30-day period running up to and through the Big Game.
And pop-ups aren’t likely to end with the final game play.
“The trend will continue,” said Begrowicz. “It will gain more popularity. As you see the first wave of tenants reach their lease’s end,” he said, “you’ll see long-term leases, renewals and deals.”
This story was originally published January 8, 2020 at 7:00 AM.
