Tough economic times have led to an increase in vacant space among retail centers and malls across the country.
When vacancy rates are high, some scramble to fill the space and generate income by offering temporary rentals or seeking out nontraditional tenants or even government agencies.
A practice that has been gaining momentum is to market space to house web-based businesses, small business start-ups and incubator programs.
Last week, the Central Penn Business Journal reported the possibility of vacant kiosks and shop spaces in the Harrisburg Mall becoming new homes for startups as a way for the mall to attract new visitors. The initiative is called, “The Futureland Project,” and the goal is to have the public interact with the young companies — and their technologies.
They are even considering using the former Barnes and Noble bookstore as a coworking space.
The idea of transforming large retail centers to house business start-ups is taking hold in other areas of the country as well.
In California, Kimco Realty Corporation created Kimco Entrepreneurs Year Start (KEYS), an incubator program for aspiring entrepreneurs seeking to launch their first retail venture. Kimco owns 125 shopping centers that house more than 3,200 stores, and has more than 100 small retail spaces available for KEYS participants. Participants in the program get free rent for one year, discounted property charges, a flexible four-year lease option after their first year of operation, and access to Kimco’s business counselors.
Meanwhile, DDR Corp. has formalized its program, called “Set Up Shop,” with 24 centers in the Atlanta area. DDR is partnering with SCORE, a non-profit dedicated to educating aspiring entrepreneurs to offer flexible lease terms and business advice to retail start-ups. The venture proved so successful that by April, DDR made the decision to roll out “Set Up Shop” at an additional 24 centers in Florida.
Incubator programs are designed to support the development of entrepreneurial companies through business resources and services. Business incubation focuses on the application of expertise by helping the entrepreneur achieve more than they would on their own.
The Futureland project at the Harrisburg Mall is not a business incubator project, but it would offer visibility to those in the start-up phase, especially those in virtual or tech businesses. Startups often lack public exposure even though some are working on cutting-edge technologies. Futureland participants would develop a physical, interactive element to educate the public as well as drive interest in their startup’s products and services.