Solomon, of NAI ReStore, expects retailer struggles to spread as consumers keep watch of their spending as gas soars above $4 a gallon, the dollar keeps falling, job losses mount, the stock market drops into bear territory and housing values plummet.
A number of national chains — including AnnTaylor Stores Corp., Talbots Inc. and Pacific Sunwear Of California Inc. — have already closed hundreds of stores this year. Others, like gadget maker Shaper Image Corp., have filed for bankruptcy protection.
Strip center owners now are considering fitness centers, churches and local retailers for spaces left empty by the Linens 'n Things, whose parent company Linens Holding Co. filed for bankruptcy protection in May — a move they wouldn't have considered in healthier economic times, said Mark Baziak, a senior vice president at real estate service firm Grubb & Ellis Co.
"Landlords are OK'ing guys they didn't look at before, like an alternative retailer with four or five store locations. Maybe their credit isn't great," Baziak said. "They realize otherwise they may not be able to fill those vacancies for years."
To mitigate the risk of unknown retailers or new brand images, mall and strip center owners are offering short-term leases at first, from six months to one year, at desirable rents until they see if the store takes off.
For big-name brands trying to roll out new concepts, like Abercrombie & Fitch's Gilly & Hicks stores or Victoria's Secret's Pink stores, those leases are a way to find the right location without a big commitment, said Richard Hodos, an executive vice president at CB Richard Ellis Inc.
"Doing these pop-up stores is one way to test to see if the concept has legs," Hodos said.
And for new store owners, short-term leases during difficult times may be the only way to get into a great mall location instead of a kiosk or an out-of-the-way, standalone building.
At the Bel Air Mall in Mobile, Ala., first-time business owners and sisters Amber and Mandy Forbes have six months to prove their store's mettle before their short-term lease expires. Polish, a woman's boutique, lights up a space left vacant by G&G, part of BCBG Max Azria.
If the store generates solid foot traffic, a long-term lease could be in the offing. The sisters are optimistic; so far, sales since Polish's opening on May 31 have exceeded their projections.
"The reason we went for the temporary lease is because this is the place you go and shop in Mobile. And it was a good deal," 24-year-old Mandy Forbes said. "We knew we should go for it and see how it goes."