LeaseToMe

Retail spaces are getting smaller.

Lease sizes have fallen more than 30% over the past 15 years, and last year the average retail lease size was just over 3,000 feet - an all-time low.

A number of factors contribute to this trend, but what's most impressive is how retailers are evolving to add more value with less space and less inventory.

We're seeing successful retail businesses use spaces as a way to build deeper relationships with their customers - helping with personalized product discovery and even hosting events to help build community.

Salespeople are more focused on creating authentic, meaningful interactions than on moving maximum inventory and being "salesy".

Blended with the streamlined selling of eCommerce, physical stores and employees can now put greater emphasis on customer support and familiarizing customers with their brand, which can all be achieved with a smaller, more minimalistic space.

Over the past year, more than 300 businesses have posted their real estate requirements on the LeaseToMe marketplace to get greater exposure to lease options.

Throughout that process, we have learned a lot about what prospective tenants need.

One takeaway was particularly clear: small businesses need access to hands-on guidance to successfully navigate the leasing process.

So, in addition to the LeaseToMe platform, we are excited to announce the launch of our retail tenant advisory services in the five boroughs of New York City.

Our goal remains the same - to facilitate quality matches between tenants and landlords. Our advisory services will serve as another tool to help us achieve that.

"There are a handful of retailers that appreciate the profound shift that the hybridization of retail and the attendant changing role of the store imply.

Not only are they seeing physical stores as assets, instead of liabilities, they are moving aggressively to shift their store, supply chain and real estate strategies.

They are unbundling and re-bundling functions to focus on driving share growth regardless of the channel that gets sales credit. In fact, they see the customer as the channel and they embrace the blur that is modern shopping today.

They accept that winning, growing and keeping profitable customers in the future is not about tweaking the current formula."

-Steve Dennis

Someone has to fill that vacant commercial space out there.
Submit your needs and lease with ease.

With the landscape of office space changing due to remote and hybrid work, landlords are asking themselves, what will bring people back to the office?

Beyond improving the experience within the office itself, improving the districts as a whole by transforming ground-floor retail and indoor/outdoor public spaces will provide new value to office-goers.

In short, a deeper focus on place-making, creating environments that people want to come to, with new restaurants, parks and amenities will help revitalize struggling office districts.

"Periodic" is a permanent pop up shop that acts as a retail incubator for brands testing the market and seeking access to turnkey brick and mortar retail. A thoughtful interior design allows for flexible use of the space to iterate on different retail themes. As the industry continues to evolve pop up models like this allow for a wider variety of ways to test and expand retail concepts in new geographies.

https://www.mind-mag.com/retail/the-permanent-pop-up-fusing-impermanence-and-sustainability/

Prior to 2020, the experience economy was thriving. Ticket sales for festivals and spectator events were rising. Driven by the millennial generation seeking memorable experiences over physical purchases, events were hot.

Then the pandemic hit, and the perfect storm of social media platforms and the desire for self-expression lead to the growth of the digital performance economy.

Influencers, online performers, and side hustle entrepreneurs sprang up left and right with a message to share. Easy eCommerce and social media platforms empowered artisans to build audiences. Clubhouse created a new way to interact and broadcast performances across networks. Creating a podcast now just requires downloading a free app.

All this leads us to believe that there is a transition underway, from selling experiences to supporting performances. Like it or not the age of the (micro) influencer is here. And companies who understand and capitalize on this transition will thrive.

In 2019, eCommerce sales accounted for 16% of total retail sales. When the pandemic hit in 2020 this number jumped to 21%.

Substantial growth, but surprising that even during a national lockdown 79% of sales still took place in physical stores.

Retailers are learning what this boost in eCommerce means for their business models and their real estate portfolios.

They're leveraging store networks for online fulfillment to make eCommerce more efficient and diversifying store formats, sizes, and features by location.

The current market is one of transformation- to right size portfolios and test new products and approaches in changing markets.

It sounds simple, but following leasing best practices can save you a lot of money in the long run.

Learn more- leasetome.com/leasebrary

Digital initiatives are now almost a necessity to compete in the retail industry. They have jumped 10% in the past two years. But retail is still largely an experiential game.

Selling experiences goes beyond movie theatres and theme parks. Some retailers are asking themselves, what would they do differently if they charged admission?

Retailers that leverage technology to make shopping experiences more memorable will thrive in the post-pandemic world.

Winter is over, vaccines are rolling out, but the shock wave from the pandemic is lingering.

Some businesses are grabbing opportunities presented by this unique market and are investing in the future.

Rents in key shopping corridors of NYC are getting more and more affordable.

Customers have pent-up demand and plans for lifting restrictions are in place.

Now is the time to pursue your dream space.

LeaseToMe helps make it a reality.

There's no doubt consumer behaviors have shifted over the past 14 months.

As result subscription services have been highly successful- they've outperformed their peers with revenue growth last year of 12%.

Many brick-and-mortar retailers have created their own subscription models which have proven to be a lifeline during the uncertainty of the pandemic.

How could a subscription add value to your customer and be part of your omnichannel approach?

Leasing commercial space is one of the most important decisions you will make for your business.

A lot rides on the lease agreement as it establishes the relationship between tenant and landlord, covering a wide variety of terms and contingencies that have lasting financial implications.

A detailed evaluation of your business's needs and goals, and connecting with an experienced tenant rep. broker are important first steps in the leasing process.

Stay tuned for more leasing tips.

The pandemic has been tough on physical retail. Many brands have dropped out of physical retail in th epast year.

But many of those who have sustained have improved their instore experiences and invested in new technologies. Now, with retail stores in most regions leasing at a discount, businesses will be looking to reinvest in physical spaces over the next six months.

Opportunity awaits...

What are some of the cultural impacts of digital innovation?

80% of shoppers say convenience is more important now than it was five years ago.

Offering seamless, convenient, and personalized experiences across all channels is no longer a luxury for retailers- it will soon be the norm.

Successful retailers will factor a digital strategy into brick and mortar decisions as the recovery takes place in 2021.

Landlords like AMP Capital Shopping centers have committed to ambitious real estate sustainability strategies. Leveraging new property technologies like BrainBox's AI and smart waste systems they are improving building performance while creating exceptional customer experiences. With sustainability at the forefront of the consumers' minds, these programs are expected to grow.

A recent study from Datex Property Solutions found that rent collections are steadily improving. In February, for the first time since the beginning of the pandemic, they have surpassed 90% amongst national retail tenants, showing drastically improved performance in this category.

In a competitive real estate advisory industry, technology is increasingly being used as a differentiator. Investing in automation, integrated systems, and cloud-based solutions helps free up teams to focus on core value creations and client services. What will be the next investment in technology for your company?

We’re proud to support the Institute for Market Transformation and the Better Buildings Green Lease Leaders program, which is accepting applications until March 31 for 2021 recognition! To learn more about the program, apply for recognition, or access green leasing tools and resources, visit: http://bit.ly/38RL1lZ

The Restaurant Revitalization Act plans to give out grants of up to $10 million to eligible restaurants. Businesses that are non-publicly traded and franchises with less than 20 locations are eligible for the program. They may receive a grant equal to the amount of their pandemic-related revenue losses, which are determined by subtracting 2020 gross receipts from 2019 gross receipts. The aid aims to be a catalyst for the recovery of small, independent restaurant and franchise operators hit hard by the pandemic. Grant applications will begin being processed in the coming weeks.

With a post-Covid world on the horizon, retailers are anticipating what consumer behaviors adopted during the pandemic will stick and how they can set themselves up for a fruitful recovery in 2021. We are seeing some creative partnerships between big box stores and brands, such as Kohl's and Sephora collaborating on in-store sales, marketing, and online shopping for a new line of beauty products. Partnerships that support the omnichannel experience can help propel both players through the challenging market.

Landlords are showing some flexibility prioritizing boosting occupancy over securing long-term tenants. Negotiating long leases in this environment can be difficult. As more leases come up for renewal a 2-3 year term may be in the best interest of both parties.

The economic devastation from the pandemic must have a silver lining, right? Here are three reasons why 2021 could be a year of business growth for those who see the opportunities.

1. The landscape is ripe for innovation- entire industries are being redesigned

2.There's less competition- 31% of small and medium-sized businesses have shut their doors.

3. There's more available talent- another virus side effect

The impacts of the pandemic and the work from home shift on retail have varied greatly by market. Some outer-boroughs are seeing foot traffic increases due to higher daytime populations while Manhatans remain low. The extent to which behaviors normalize post-Covid will influence decisions around retail real estate's future.

The disturbances caused by the pandemic are spurring new transformations across commercial asset classes. Retail chains like Panera and Subway have transformed some locations into grocery stores to adapt to the current environment. Other companies are converting parking lots into ghost kitchens and empty big-box stores into micro-fulfillment centers. The way we use space will continue to shift as new technology and cultural trends emerge out of the shutdown.

In a dark retail market, light is beginning to shine through as some tenants are making the most of falling rents and flexible landlords. New and old tenants alike are proving that, in New York, brick-and-mortar retail experiences are still highly relevant.

Read More: www.bisnow.com/new-york/news/retail/plummeting-rents-retail-concepts-fifth-avenue-soho-107704?utm_source=outbound_pub_90&utm_campaign=outbound_issue_45656&utm_content=outbound_link_2&utm_medium=email

2021 will be a year of transformation. Proptech's role will continue to evolve as new trends materialize.
www.unissu.com/proptech-resources/5-trends-that-will-shape-proptech-in-2021

As retailers expand their digital presence, improving the efficiency of supply chain and logistics is key. Automating fulfillment while creating a seamless shopping and delivery experience for customers will help optimize the omnichannel journey.

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Some interesting stats on the outlook of CREtech from Deloitte
www2.deloitte.com/us/en/insights/industry/financial-services/commercial-real-estate-outlook.html

Data constructed from billions of mobile GPS observations found retail was down 16.2% from baseline in January. Let's hope this statistic continues to fall as the rollout of the vaccine progresses.
https://www.locate.ai/retail-tracker

Common Area Maintenance costs are a major component to consider in a commercial lease. Learn more here:

leasetome.com/leasebrary/what-is-cam-in-a-commercial-lease

One store not only surviving the pandemic but thriving is Target. The retail giant has opened 11 new locations in the past 14 months and has plans to open 40 more in the coming year.
https://therealdeal.com/2020/12/07/targets-big-nyc-expansion-continues-with-soho-lease/