Subleasing isn’t relegated to the college apartment market anymore.
Retailers are increasingly leasing floor space to other companies in an effort to shrink the size of their stores without moving and find a steady source of cash.
Sears has been a big player, partnering with companies such as Primark, Whole Foods, Dick’s Sporting Goods and Forever 21.
“In these cases, we continue to operate in the same location, in a smaller (but still large) space, leasing out the rest to retailers who will drive traffic and who compensate us for that space,” Sears Holdings chairman Eddie Lambert wrote in a recent blog post.
Best Buy and Staples are expected to do more in 2015.
“Retailers are going smaller. You see Wal-Mart rolling out its more compact, urban model and making a big push with that,” Lauren Brunner, founder of The Retail Strategy Real Estate Group, said in a trends outlook posted by the International Council of Shopping Centers.
“Existing retailers with long-term leases realize they are not efficiently and effectively using their square footage. They are finding opportunities to lower their overall economics by subleasing out portions of that space.”