This post originally appeared on tBL member Progressive REP Blog and is republished with permission. Find out how to syndicate your content with theBrokerList.
While reviewing Progressive Real Estate Partner’s leasing activity for the year, I’ve noticed an interesting trend happening in SoCal’s Inland Empire. Year to date a whopping 78% of our leasing transactions have been with independent mom and pop retailers. This is by far the highest percentage since 2010. In 2015, 2016, and 2017 the figures were 58%, 58%, and 65% respectively.
I love seeing this trend as mom and pop shops add a unique flavor and local character to retail centers. They also often offer one-of-a-kind local products that attract customers. Many of the cities and chambers in the Inland Empire have active “Shop Local” campaigns focused on independent retailers and “Small Business Saturday“, which coincidentally is today, has become another popular holiday shopping tradition.
What’s driving the resurgence of the mom and pop retailer in SoCal’s Inland Empire? Here are my thoughts:
Consumer Confidence is Up: With all of the positive news about the local economy, independent operators are more optimistic about their ability to operate a successful business and there are several programs available to help small businesses including SBDC organizations, SCORE, local chambers and others.
Start-Up Culture: Millenials in particular have shown a strong preference to chart their own course and in many cases have chosen to open their own stores. Popular shows like “Shark Tank” have helped motivate a whole new generation of entrepreneurs looking to make their mark.
Local Market Knowledge: Independent operators generally live very close to where they are opening their business and because they have intimate knowledge of the trade area, they are willing to open stores in less desirable real estate than corporate retailers who may not fully understand the nuances and opportunities available in a particular trade area.
Less Competition for Space: The “best space” in the market which tends to attract nationally recognized tenants is pretty much leased and there is not a lot of new space coming on-line in the Inland Empire. As a result, many national users are slowing their expansion even though they would like to open more locations.
Most Active Categories: In reviewing our portfolio here’s a breakdown of the types of mom and pop shops that are leasing space:
- 32% – Health & Beauty which includes barber shops (5 of them), martial arts, tanning, nail salons, eyebrow threading, massage, hair salons and exercise studios.
- 29% – Restaurants which includes Poke, Vietnamese, Boba, La Michoacana Ice Cream, Mexican, Coffee, Pho, Bakery and a Bagel restaurant.
- 21% – Other which includes staffing agency (4 of them), escape room, insurance, coin laundry, dentist, and cell phone repair.
- 18% – Specialty Retail which includes a bridal shop, smoke shop, carpet store, furniture (3 stores), hat store, dollar store, pharmacy, and ethnic grocery store.
We’re seeing so many changes in the retail world and this is just one more example. It will be interesting to see if this trend continues in 2019. In the meantime, I hope you and your family had a very Happy Thanksgiving and I encourage you to join me in doing some of your shopping at independent businesses this holiday season!