The Entrepreneurial Spirit

On the leasing front, we are certainly seeing the realization of many pundits predictions that when larger companies layoff many talented workers a common strategy is for those individuals to seek out independent careers by starting their own businesses. Franchise trade groups are reporting record numbers of inquires by potential franchisees. ICSC, the premier retail, real estate trade organization is predicting franchises will be the most significant driving force in filling the large retail vacancies around the country.

At Baceline, we are educating our leasing teams on the opportunities to work with new franchisees. As you might expect one of the biggest challenges these talented entrepreneurs face in today's environment is financing the significant upfront costs associated with opening a location. Hefty franchise fees, FF&E, advertising, working capital all add up to an enormous hurdle when there is very little financing available. We tell our leasing teams that for a new franchisee with strong management skills, a good plan and support of a strong franchisor we are willing to take a chance on their success by being more creative with our lease structuring.

Even non-franchised entrepreneurial concepts have been popping up throughout our portfolio. Specifically we have seen interests from individuals starting a glass blowing retail shop with supportive classroom training, lingerie shops for plus-sized women, homemade cakes and of course, only in Texas, a 35,000 square foot combination movie theatre and microbrewery. Interestingly it is not only our retail portfolio that is seeing some of this entrepreneurial spirit but it in our industrial portfolio the most active prospects are start-ups looking for small suite spaces on short term leases.
Another benefit of these local businesses is, in our experience, it is rare for them to request a lease restructuring unless they have come upon very hard times. Whereas the national tenants as a matter of course request lease restructurings regardless of store performance.
For this Fourth of July here's to the American spirit may it grow and prosper.