Pop-up shops have become a key part of the shopping mall ecosystem. Once rare, they’re now expected. And while many customers look forward to the costume shops and candy stores that arrive before the holidays, landlords might look forward to the ways they occupy valuable floor space.
When you rotate your retail space with pop-ups, you’re constantly scheduling different businesses to get the most from your space in the valuable holiday periods. You’re also dealing with many more leases, and you want to make sure you cover your bases.
Different leases for different customers
Pop-up shops come to the table with different needs than your anchor stores, and you’ll want to make sure that your lease serves their needs as well as your own. These businesses want to set up quickly, make a big impact and keep their costs down. You’re looking to gain income, draw visibility, limit your liability and protect your image. A good lease can work for everyone, and the American Bar Association (ABA) recently looked at some of the ways you might tailor your leases for pop-up renters:
- Highly specific purpose: Pop-up shops may not be as invested in your long-term success as anchor stores, so you can counter any lower trust levels by making sure your lease includes a highly specific purpose. These short-term leases often include restrictions, as well, that prohibit alternate uses and hazardous materials.
- Taxes, insurance and utilities: If your tenant isn’t going to be around to pay taxes, insurance and utilities for the space, you can build those fees into the basic lease.
- Timing: Pop-up shop owners need to know that their space will be delivered on time. They’re looking to arrive, set up and use the space to its fullest potential, so the delayed delivery provisions you might write into a standard contract aren’t likely to go well with a pop-up tenant.
- Permits and indemnification provisions: Pop-up shops may need to get different permits and licenses to use the space the way they intend, and you can include indemnification provisions that protect your interests should the stores choose to run without any of the required permits or licenses. You may also need to allow yourself time to get consent from your insurance, mortgage lender or other tenants.
- Alterations: When you lease space to a pop-up store, you need them to leave it ready for the next renter. Provisions that deny or limit alterations can be crucial.
These are only some of the ways your short-term leases may vary from long-term leases, and your short-term leases may also vary from each other. Depending on the intended use, you may also be looking at different scenarios for insurance, subleases and right to entry.
It helps to understand the larger picture
When you’re rotating pop-up shops through your retail space, you’re going to need more leases. An attorney who has specific experience in shopping mall leases can help speed you through the process and book your space through the holidays—all of them.