As traditional leasing plans, for retail spaces in particular, have been interrupted by bankruptcies of traditional retailers and the shift in consumer habits to online shopping, a more transient tenant form is gaining popularity – the pop-up. Retail pop-ups are short-term occupancies of a retail space and now represent a category far more diverse than seasonal retailers (like Halloween costume superstores). Today, retail pop-ups range from direct-to-consumer digital first brands testing prototypes with customers in brick and mortar spaces, to short-term marketing events promoting new product lines, to restauranteurs trying to build a following while they seek longer term space and/or financing.

Retail pop-ups offer retailers a lower-risk opportunity to test a location, but they can also generate buzz around a space as the limited-time-only retail experience draws customers and visitors to a space in need of increased foot traffic. In some circumstances, a pop-up is an effective marketing tool not just for the retailer but also for the property as visitors share photos and videos of their experience on social networking platforms.

The pop-up ethos is even infecting office leasing. Coworking spaces that offer users month to month memberships have become commonplace, but now spaces originally conceived of as restaurant or retail space are seeing increased use as office space. For example, the startup Spacious hosts daily coworking space in high-end restaurants (such as the Milling Room on Manhattan’s Upper West Side and Spring Natural in SoHo) and similar spaces that are unused during normal business hours, bringing additional revenue to tenants with notoriously thin margins and daytime foot traffic to otherwise quiet spaces.

But what does this mean for landlords? Landlords have the potential to enjoy increased revenue and improved relationships with tenants by embracing the pop-up trend. Consider the following opportunities:

1. Lease terms. Landlords should consider adding provisions to their standard lease that allow tenants to host pop-ups within the premises and provide for profit-sharing with the landlord. Allowing a tenant another possible revenue stream during off hours or slow seasons could be the difference that keeps a tenant in place and may strengthen a tenant over the long term by generating buzz around a particular location.
2. New services. Landlords should consider how pop-ups can provide services that appeal to other tenants. A pop-up restaurant concept, such as Fooda, which brings in a daily rotation of local lunchtime restaurant offerings in under-utilized spaces like lobbies are popular with office tenants in areas with limited lunch options and may strengthen tenant commitment to the building.
3. Advertising. Landlords should view pop-ups in empty storefronts not just as a source of short-term revenue, but also as an opportunity to market the space to new potential tenants. A successful pop-up retailer may or may not transition into a longer-term tenant, but their presence, particularly if thoughtfully designed, can increase foot traffic and create interest in the space from other parties.