At his store in Chicago’s Lincoln Park neighborhood, Courtland Hickey showed me some of the popular costumes for Halloween. Lab suits from Breaking Bad, Duck Dynasty beards, fox costumes.
His family’s run Chicago Costume for about three decades. They own two brick and mortar stores, but each year, they’re also scouting other locations.
“A couple of years ago we had nine pop-ups, this year we only have four. There’s a lot of different factors. There’s the economy and the consumer shopping habits which is the biggest factor. There’s a lot of other factors including the rent and available locations,” Hickey said.
Halloween pop-up stores are easy to find this time of year. But there are also more businesses seizing the opportunity for short term leases.
Landlords haven’t always wanted to rent to a pop-up location.
“The resistance was probably twofold. Maybe too much trouble for too little money. And there was some concern that a Halloween store might degrade the image, marketability at some point in the future,” said Rob Thomas, realtor with Jameson Real Estate.
But the economic crisis that started in 2007 made landlords start thinking differently.
“By 2011, many of those landlords we previously contacted were chasing me for locations,” Thomas said.
According to CBRE, Commercial Real Estate Services, in 2010, Chicago peaked at a 12.6 percent retail vacancy rate. The market’s recovering from the crisis, but not without some hiccups. So far this year, vacancies increased slightly to 8.8 percent.
That doesn’t mean the market has necessarily stopped improving. The post-bubble retail market is polarized. Stronger areas do well while weaker areas lag. Some businesses close up shop in one part of the city, just to open up in another area. Meanwhile, pop-ups have been able to move through both.
Temporary leases on average last for a couple of months, some as short as a weekend. Rob Thomas has seen rent for a single period range from $5,000 to $30,000.
“Although, I’ve not been directly involved but have heard from others in the industry, national brands offering large sums of money for premier locations,” he said.
He says that’s been more of a recent development with high-end properties and brands getting into the mix.
The shopping center at 900 N. Michigan Avenue is one of those. It’s got permanent retailers like Bloomingdale’s and Gucci. But like other vertical malls, it’s struggled with vacancies especially during the recession.
“A lot of the national brands really held back and they weren’t ready to expand, or they cancelled expansion plans. And so we did have to get creative and be a little bit more flexible as far as a temporary lease is concerned,” said Sarah Burrow, marketing director for 900 N. Michigan Avenue.
Not only that, vertical shopping centers aren’t really being built anymore and existing ones are dying out.
“You don’t see it done anymore and there’s a reason. People are a bit intimidated about going up and that’s been something that’s been a big challenge for us,” Burrow said.
She adds many of the center’s vacancies are on the upper level, and pop-ups were a way to curate up-and-coming brands as well as usher traffic upstairs.
“Only recently have the idea of pop-ups expanded into a broader retail selection. So what we’ve seen, which has been really exciting for our property, is these emerging designers, smaller brands, or really unique retail concepts that pull a variety of artisans,” Burrow said.
Even media brands like Men’s Journal magazine have gotten into the pop-up business. For a few weeks in December, it has set up in a high traffic shopping spot to display items featured in its magazine.
The journal said they’ve been successful so far. They’re considering the idea for cities like New York and L.A.
Realtor Rob Thomas said while the Chicago market is recovering, the imprint of pop-up shops remains.
“Landlords have discovered that these temporary uses rather than degrade the spaces marketability, it increases its visibility and it becomes a marketing tool for the landlord as well,” he said.
Thomas couldn’t say for sure whether that helped in the recovery, but at least it kept some businesses going when things were at a standstill.
Susie An covers business for WBEZ. Follow her @soosieon
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