By Ken Ashley
(LOS ANGELES) September 10th, 2010
We’ve observed the resurgence of the trend of so called pop up retail over the past year or so with interest. The concept can apply to any holiday store (those stores where you buy your Halloween costume are an example). It is also being used by toy companies and retailers of high-end clothing. The short term nature of the opportunity makes it cool to many (“Limited Time Opportunity!”) and since the commitment is very limited, the financial risk is minimal.
The same idea can be found in restaurants where proprietors can be up in running in no time and with very little capital. This New York Times article profiles a number of offerings in San Francisco that cooking up or at least serving yummy things in temporary space.
So, can pop up work in office? This is not an entirely new idea. For years project teams have moved around offices in accounting, engineering and in all types of consulting gigs. But these spaces are usually inside existing semi-permanent space and long term leased office space. And yes there are executive suites which will allow one to office for a pretty penny, but this is like renting a hotel room vs. an apartment. Executive suites are a solution, but they have their drawbacks.
We hear from companies that want to start a beachhead in another city or from entrepreneurs that they want a sense of identity, security and the ability to
function with some independence for a short term. The traditional solution for this requirement is to find a cheap sublease and hunker down. This takes time, and carries with it risk that the sublandlord fails to pay their own obligation and the subtenant gets evicted. In addition, subleases are looked at as an afterthought by landlords and getting a document negotiated and approved can be painful.
In the last downturn, several landlords offered so called “smart office” suites that were built-out for small offices with fresh carpet and paint. They were ready to go at a moment’s notice IF you liked the layout the landlord had built for you including the “sheetrock” walls. Back then you still had to rent a copier and deal with cabling issues. They weren’t really that temporary.
Now with changes in wireless technology, advances by furniture purveyors and all the office vacancy around the US, we wonder if pop up office V2 will spring to life?
Picture the scene; a company wants to open an office for 6 months in Chicago to determine if a new division can make it (Tempco, lets call it). Tempco’s forward thinking landlord offers to lease space in a designated area of a building for only 6 months. Tempco works with the landlord, furniture vendors and the communications guys to develop a beautiful, completely wireless and short-term solution.
Perhaps the landlord makes things even easier by offering a short license agreement running a few pages as opposed to a huge lease. The other vendors could have the equivalent of an Amazon.com where one could point and click their way to leasing furniture and gear that meet their needs.
Then, after 6 months, it can all go away. No fuss, no muss.
The landlord gets revenue on otherwise empty space, and likey at a higher rate per foot than normal. The furniture and phone folks get to earn revenue on their mountains of existing inventory. Tempco gets exactly what it needs in the meantime.
And maybe, just maybe because the landlord was so progressive and accommodating, when Tempco becomes the next growth company in Chicago the accommodating landlord gets the first bite at the apple for a much bigger and traditional office need. All those serving Tempco have the opportunity to develop a relationship, which many in the product business could use in this and every economy.
So, to our friends in the landlord community: we challenge you to think outside the “pop up” box on a short term and creatively different basis. We will certainly be happy to write about real world examples of pop up real estate in office; just reach out to us.