HOUSTON—With the holiday season approaching, analysts expect shoppers to spend roughly $622.35 per person at one of roughly 115,000 US shopping centers. Among the traditional sights and sounds of the retail venues, shoppers will also notice an increase in a retailing concept that has taken a national foothold—a trend known as “rogue retailing.”

Rogue retailing encompasses food trucks, pop-ups, showrooms and other nontraditional approaches to brick-and-mortar retail, a concept described in CBRE Research's 2016 National Holiday Trend Report. As rogue retailing becomes increasingly more common, landlords are taking steps to ensure national tenants and local players have access to retail space that complements the brand's ambiance, the experience retailers want consumers to have, and is conducive to the wares retailers are looking to sell.

Originally, rogue retailing began as a way for first-time retailers to dip their toes into a market without having to commit to a long-term lease; this concept also provided downside protection to landlords who were not entirely comfortable taking a chance on an unknown (and inherently risky) brand. Recently however, rogue retail locations have matured into a way for large national tenants to test new product lines, sometimes within flagship locations, as well as a way for predominately e-commerce retailers to branch out and create more traditional brick-and-mortar presences.

Landlords Westfield and Simon are embracing these concepts and dedicating space to short-term retailers. Once seen as a space-filler during unexpected vacancies, those spaces are now viewed as a way to rollout local brands, perform demos and offer shoppers a specialized selection of products. Some malls are allocating as much as 5% of retail space in order to have a consistent pipeline of planned, short-term tenants, with lease terms ranging between one and six months, which typically utilize a gross rent structure.

Houston got in on the pop-up game this past summer with its own Kanye West pop-up at The Galleria. Also, rogue restaurant pop-ups are being utilized as promotional events to stir up buzz in the wake of new restaurants entering the market. For instance, Shake Shack opened its first Houston location this month in The Galleria. Beforehand, the New York City-based burger joint held a one-day pop-up festival in conjunction with local restaurants and breweries serving 1,800 burgers. Additionally, the upcoming Super Bowl LI is anticipated to spur more pop-up activity as retailers take advantage of the 1 million visitors expected to flood Houston in the two weeks prior to the game.

“Texas' retail business is getting a lot of attention lately because the state boasts a healthy economy, a low cost of living and high employment rates,” Daniel Taylor, managing director, retail, Texas and Oklahoma division of CBRE tells GlobeSt.com. “Unlike markets like NYC or LA, Texas' retail marketplace appeals to consumers who use shopping and dining as a form of entertainment. Forward-thinking landlords have picked up on the rogue-retailing trend and are building out retail space that appeals to short-term retailers who are testing their products in a market before making a possible shift into a brick-and-mortar space. Rents in Texas are relatively cheap in comparison to markets like New York, Los Angeles, etc., so shorter term tenants are able to take advantage of the marketplace. Any retailer, whether it be a pop-up or more established brand, is looking at Texas as a bright spot within the current economy.”

Rogue retailing's tendency to upend traditional lease structures while maintaining retail property occupancy (hence the name) is a win-win for tenants and landlords alike. With national retailers, e-commerce providers and boutique players all looking to expand into a brick-and-mortar presence, consumers should expect to see a variety of new and upcoming tenants alongside favorite brands in retail centers across the country this holiday season.

Instant Insights /

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