In the past few months we’ve witnessed local companies forced out of downtown Detroit due to rising rental rates. Unfortunately, this is the price of change in a market such as Detroit. As more buildings fill up, landlords want to charge higher and higher rates, and asks for increased rental rates are often realistic in a changing market.
As an entrepreneur and owner of a co-working model called Bamboo Detroit, I can’t help believing that we could apply this same efficiency model of shared space, resources and community to the world of retail. Co-retail options maintain affordable pricing for retail entrepreneurs, allowing a number of vibrant local businesses to share smaller amounts of space and thrive in downtown Detroit. It also allows for greater business diversity, avoiding the region from becoming a sea of national “big box” retailers.
Co-retail is similar to co-working. Rather than going out on your own as a business owner and assuming all the high costs associated with owning and operating a retail storefront, several business owners pair together to share the costs of one space. These business owners divide all hard costs such as rent, common area maintenance charges, utilities and more. The perks can be more than just lower rent costs for the entrepreneur, but also a community of entrepreneurs working together to support one another. It could also create a destination for shopping local in Downtown Detroit. Imagine a block downtown where many Detroit made products and vendors are? You walk in and see dozens of different brands, all in one convenience space for you to explore.
The idea of “co-retail” isn’t new but it doesn’t exist yet in downtown Detroit formally. The Cass Collective is an 1,800-square-foot “pop-up” co-retail space in midtown that allows start-up businesses to test the waters of having a physical storefront before actually signing a lease of their own. It’s a step in the right direction and the future of retail.
At Bamboo’s co-working space, we see a variety of amenities and perks for the landlord. Offering co-retail can make it a destination for those visiting the area. This can bring more attention and awareness to a landlord’s building. A landlord should always want to stay full and active as a space, and co-retail or other shared business models can be a flexible and attractive way to draw people to you. How does a landlord make sure space is always leased to capacity and requires little day-to-day on-site management? An entrepreneur should take on the task of keeping the co-tenants in their space, or the risk of the full lease, subleasing it out to other entrepreneurs. For example, Bamboo manages and operates our co-working spaces. Our tenants deal with us directly and Bamboo Detroit works with the building management company as necessary.
In urban areas, shared real estate models are the future. Co-working spaces are on the rise globally, with over 500,000 spaces reported. Co-retail is an exciting concept, a destination, and it might be the future shopping outlet as more and more retail businesses balance out their models with e-commerce. A shared retail option would continue to foster support for local entrepreneurs while adding and preserving to the uniqueness that makes our city Detroit.
Amanda Lewan is co-founder and CEO of Bamboo Detroit.