California Centers

MAY 2017

California Centers Magazine serves retailers, developers, shopping center owners, investment sales brokers and tenant representation firms throughout the state of California.

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46 California Centers Magazine | May 2017 C C S hort-term leasing is today an in- tegral part of the shopping center landscape across North America. Specialty leasing is growing and be- coming more sophisticated, and some interesting trends are emerging in this dynamic market place. Here's the backdrop to this phenomenon: • Landlords are under mounting pressure to introduce products and services that cannot be accessed on the internet. • Bricks-and-mortar retail is no longer just about product. Shoppers seeking an identifiable product can get it, usually cheaper and with less aggravation, using their computer, tablet or smart phone. • Landlords and retailers must cre- ate an exciting customer experience in their shopping centers and stores. Without the experience a boredom factor creeps in. Landlords and retail- ers who ignore this reality will likely see consumers increasingly turning their backs on their centers and phys- ical stores. • Specialty Leasing brings about fresh ideas, innovation and ongoing change so it can play an important role in achieving the retail experi- ence. It's no surprise then that shopping centers of all sizes and descriptions are increasingly turning to short-term retail outcomes to remain relevant in a fast changing retail environment. Short-term retail may not be a pan- acea to the online shopping threat but it is an effective strategy to en- tice consumers to continue visiting shopping centers. At the same time exploiting a center 's excess capacity generates welcome ancillary income so landlords are embracing the con- cept with great enthusiasm. Some of the macro changes and trends we're seeing with specialty leasing are sobering. INTEGRATING SHORT-TERM TENANTS An undeniable trend in short-term retail is that standards are improv- ing dramatically. Shopping center landlords are doing everything pos- sible to achieve congruity between their long and short-term retailers and are targeting quality retailers to open and experiment with pop-up units. As a result established brands are producing build-outs, merchan- dise displays and marketing support outcomes that are often hard to dis- tinguish from their permanent loca- tions. Burberry's pop-up store at Syd- ney International Airport is a shining example of best practice build-out and visual merchandising from a temporary space. In time, the pop-up will be hard to differentiate from the permanent store in terms of presenta- tion, visual merchandising and retail standards. The Burberry pop-up location at Sydney International Airport is hard to differentiate from a permanent retail location. SPECIALTY LEASING BECOMES A BIG OPPORTUNITY FOR CENTERS Specialty leasing can bring fresh ideas to centers, while serving a niche and mitigating losses to online sales. By Stephen Katz Courtesy: Casual Lease

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