March 10, 2020
San Francisco residents were asked to vote on a new plan that would tax owners of empty storefronts. Proposition D passed with 68% of the vote. Cities like Toronto, Canada, are looking at similar plans as a way to get retail space filled. As a 1.43 mile stretch of one of the city’s busiest streets has close to four dozen empty retail spaces, the tax is hoped to stop the trend of commercial real estate buyers from sitting on properties until they’ve collected enough to sell for development.
While this may not please property owners, it’s great news for companies looking at experiential marketing campaigns. To avoid the tax, property owners need to start getting their empty storefronts filled. Pop-ups, installations, mobile tours, PR stunts, and events all lend themselves to renting empty retail spaces for a few days or weeks. The property owner fills that space to avoid the tax. You have the perfect location for your marketing campaigns. Leveraging that space is easier than you might think.
Do Your Research
When your marketing campaign is in a city where empty storefronts are taxed, take time to see how much property owners lose every day. If you point out exactly how much that store is losing in the day/s or week/s you would like to lease the space, it’s a strong selling point. It also gives you an idea of what you could be paying for the amount of time you need that retail space.
San Francisco’s Proposition D will tax owners $250 per square foot starting in 2021 when a retail space is empty for at least six months. It goes up to $500 per square foot in year two and $1,000 in year three. It’s in the owner’s best interest to get that store filled. If that retail space is 1,000 square feet, the owner could face a tax bill of $250,000. That’s a huge loss to a property owner, which can help you negotiate a reasonable leasing fee.
You may not be able to lease it for the full six months, but team up with others who are interested in the same space. You can team up and approach the owner together about leasing as a group and using for your experiential marketing campaigns.
Find Out Who Owns the Store and Ask
It never hurts just to ask. Some empty stores will have a “For Lease” sign in the window. While that property owner may have no plans to lease the space, it’s a place to start. When presented with the benefits of leasing even for a short period, it’s worth it. Be ready to present your facts on what the property owner stands to gain. The idea of profiting rather than losing money is going to help convince the property owner. A very, very short lease is often more appealing to a property owner whose intent is to eventually sell to developers.
If there is no sign, you’ll have to do a little research. Try to get the name of the property owner through public records at City Hall or with the town clerk. Neighboring stores may also know who owns it.
Birds Eye temporarily rented empty space to turn it into a one-day-only restaurant. The items on the menu all included the company’s frozen vegetables. They didn’t need the space for more than a day, but it filled that space for that day and led to a strong Instagram campaign with photos of the meals and diners spreading around social media.
Once you know who to call or visit, set aside some time to talk to that owner. Have your experiential marketing plan nearby to be detailed about what you plan to do. The owner should know if you’re bringing in furnishings, décor, and making any quick changes. If you are, you may need to guarantee you’ll return the space to its original design when you’re done.
Market Well Without Ever Going Inside
Skyy Vodka came up with a clever way to leverage an empty storefront in a meaningful, eye-catching way. They took one of their photos and had it sized to fit the boards covering an empty storefront. Instead of an empty, boarded-up store, pedestrians and drivers pass a vivid image of the company’s well-known bright blue bottle of vodka. They didn’t need to have a team hosting or arranging a pop-up or other event. All they needed was someone to put in the photo installation.
You could do the same with your experiential marketing campaign. Talk to Factory 360 about your vision. We’ll help you narrow down the best marketing campaign and figure out how to leverage empty retail space in a way that matches your budget and generates interest. Call us to get started.