Temporary Leases Gain in Popularity

SEATTLE-For Seattle real estate broker Mike Olsen, Halloween starts in May. For the past five years, the broker for Dallas-based Staubach Co. has been scouting and securing key temporary locations for Spirit, a nationally-based retailer that focuses exclusively on Halloween and only needs space for the three-month period between Mid-August and mid-November. This year, the company wanted eight locations throughout the Puget Sound and Portland, each in the range of 12,000 sf to 15,000 sf.

It’s a job that Olsen, who typically represents traditional long-term tenants, has found both rewarding and challenging – but one he sees as growing trend among retailers looking to capitalize on a certain holiday or retail event. “Temporary leasing is nothing new, but I see an increasing number of retailers taking advantage of holiday seasons or special retail events on a temporary basis,” says Olsen. “Specifically around Halloween, I know of two local competitors that have started their own temporary Halloween stores in the Puget Sound area.”

Olsen says of the biggest challenges brokers for temporary tenants face is just opening the door with landlords, who many times have a negative connotation about temporary tenants and don’t want anything to do with them. He says another increasingly big obstacle is finding the space his client needs in a market that is as hot as the Pacific Northwest currently is. In addition to having a difficult time locating the space, he has a tough time securing the buildings for the three-month period between mid-August and mid-November when his client needs it because they are prime months for permanent retailers to enter a market.

Though Olsen admits that he needs to do several temporary deals in one shot – such as the nine stores he located for Spirit this year – to make it worth his while financially, he says he also reaps other valuable benefits from it, such as having a reason to contact landlords on a regular basis. “It’s another excuse for me to be in front of landlords,” says Olsen. “And while I’m there, I usually learn about things in the pipeline, such as redevelopment plans or space that is coming onto the market, which helps me service long-term tenants.”