Ancillary Retail

MAY 2018

Ancillary Retail magazine is the retail industry’s resource for ancillary income markets. Ancillary Retail will provide relevant news, best strategies and practical tips to help developers and retailers grow and sustain successful businesses.

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32 Ancillary Retail | May 2018 space into a temporary lease activation within one month, providing flexible operation terms to meet Restoration Hardware's needs. Federal also contributed strategic com- munication support to increase awareness of the pop-up including social media engagement and email blasts. Hello Kitty Café was another national name that gar- nered a great deal of buzz and excitement at Federal prop- erties through its mobile pop-ups that began in April 2015. The decked-out Hello Kitty Café truck sells baked goods and Sanrio merchandise in parking lots of the shopping centers. Federal has a long-term, multi-property partner- ship with Hello Kitty Café, which has upcoming events scheduled at several Federal properties, including Assem- bly Row; Bethesda Row in Bethesda, Maryland; Pentagon Row in Arlington, Virginia; the Avenue at White Marsh in Baltimore; and Santana Row in San Jose, California. On the more local side of the spectrum, Sara Campbell is a tenant with a "win-win" growth story at Federal. Camp- bell, a Boston-based clothing designer who sells on-trend women's fashions with a regional twist, transitioned from a wholesale business to a temporary tenant to a permanent tenant at Linden Square in Wellesley, Massachusetts. Sara Campbell initially signed a short-term "test store" temporary lease. Federal's support for Campbell's test store included social media promotion, public relations services and cross promotion with events at Linden Square. The boutique is now a permanent tenant at the 223,000-square- foot center. "In 2009, we got the opportunity to use an open space in Wellesley for a fundraiser," writes Sara Campbell on her website's blog. "We decided, hey, why not use this oppor- tunity to test the waters for further expansion? We planned to stay in the Wellesley location for two weeks…and, well, you know how the story ends! The test was an extreme suc- cess!" Finding retailers that fit a market takes patience and time to develop relationships. "When you find a great retail busi- ness, you don't always just walk in and say, I've got a store that's X square feet in this particular state. You interested? And the retailer is ready to roll tomorrow," says Kelleher. "More often than not, a lot of what we're doing is building for the future. So our database of potential specialty leasing clients could be a person I spoke to two years ago. We're working on deals today where the relationships began two or three years ago." In order to cast a wider net, Federal Realty launched a national partnership with Campus Scout in July 2017 to offer pop-up space opportunities to entrepreneurs across its portfolio. Campus Scout is a New York-based recruiting and career-coaching firm that focuses on recent college and university graduates and women entrepreneurs across the United States. The partnership matches Federal Realty's real estate with new or emerging talent looking to launch a new product, test main street retail or learn more about the marketability of a new concept. "We sought out Federal Realty because we found that a considerable percentage of Millennials and Generation Z talent is not looking to follow in their parents' path with a 9 to 5 job, sitting behind a desk hunched over a computer, but rather have harnessed their inner entrepreneur, developed something special and want to build their own business," says Lynn Zuckerman Gray, founder and CEO of Campus Scout. "Federal Realty's prime locations, success stories with pop-up retail and out-of-the-box thinking is a perfect match for us and the talent we work with." In Miami, Federal worked with a swimwear designer who had never sold her product line in a physical retail store. Kelleher says Federal had an empty space at The Shops at Sunset Place that was the right size, while the property marketing team helped her place signage on the most trafficked portion of the property and included her in events that are typically reserved for permanent tenants. "All of these initiatives and more are the benefits of work- ing with a landlord that is committed to the tenant's tri- umph, not just cashing their check," Kelleher says. As retailers looking to break into bricks and mortar be- come savvier, some of them lean on businesses such as PopUp Republic, a service that connects landlords with tenants, large and small. But no matter how the two parties find each other, it's critical that each understand the others' needs. "Specialty leasing is entirely, entirely different than a per- manent lease," Kelleher says. "You've got to understand how to approach these unique tenants. There is a flexibility that is essential and an understanding of how much space they need and for how long. Often we do what we call white box- ing a space, so that it's ready immediately for a tenant who might be ready to go today. But the biggest piece of all of this is to be simple and streamlined. We don't want a 60-page lease that a mom-and-pop business feels they need to hire an attorney to understand what they're signing. It's all about ease of entry, speed and flexibility. Looking ahead, data and technology are going to continue to be a growing piece as people seek reassurance they're making the right deals." n MANAGEMENT PROFILE Hello Kitty Café pop-up truck at Bethesda Row in Bethesda, Maryland.

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