SoHo Landlord Finds Offbeat Way to Beat Retail Vacancy

The Collab space at 433 Broadway and Abdul Thunayan (Credit: LinkedIn)

The retail space in Soho’s 433 Broadway was newly constructed with high hopes. It first opened its 9,100 square foot space in 2015 when the market was hot, asking $590 per square foot. Now, three years later, there is still no sign of a long term tenant and hope is dwindling. Omari Properties, the landlord which acquired the property in 1996 and spent about 15 years developing it, decided it’s time for an unconventional plan.

That’s where Collab came in. Collab, founded by Abdul Thunayan, is a store that allows online brands to showcase their goods in exchange for a fee. Like a pop-up store, Collab operates with minimal buildout, and can open and shut its doors within weeks. Instead of showcasing a single company’s products, however, this startup showcases dozens of lines from online brands that don’t have the money for a store but still want a shot at Soho’s shoppers. As reported by The Real Deal, brands can rent a just a small shelf or clothing rack for between $1,500 and $2,500 a month. With minimal risk and low operating costs, chances for success are high. Collab pays the rent, mans the store and manages sales. A “curations team” decides which brands work together and designs the layout. Collab also takes a percentage of the sales, and so does the landlord. Thunayan says the compared to a regular lease, the revenue sharing model is “more flexible and more profitable for the landlord”.

Last month Collab opened a store with about 2,000 square feet. It is now set to expand to 6,000 square feet. Eddie Omari’s son in law, Edan Abehsera, is CEO of the Cubico co-working space. Abehsera praised the working model as “very low-risk”, saying it’s an ideal temporary fix —less disruptive than a pop-up store and more economical than hiring a broker for a short term deal. Without disclosing details of how much the space now brings in, he claims the model could potentially raise more than the original asking rent for a long-term lease there. “If the market goes right, this could be the new normal,” said Omari.

By: Hadassa Kalatizadeh

 

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