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Leap's Approach to Real Estate

October 21, 2021
Leap's Approach to Real Estate

At Leap, we offer a Platform for brands to deploy immersive retail stores. We’ve said a lot about those stores, but there is an entire additional layer that makes all those stores possible—real estate.

Just as we work closely with brands, we’re closely involved with landlords, developers, and property brokers to find ideal locations in top retail corridors and shopping centers. With this approach, we can build our strategy around creating effective clusters of stores by street, neighborhood, city, and region.

Leap partners with every brand on our Platform to determine the optimal location(s) to launch a new brick-and-mortar store. This is dependent on the brand’s primary data, including the location of their ecommerce customers, annual sales figures, and financial data. We line this up with market availability, the economics of the space, and term structures.

Leap leads the search for property through our in-house tools and a network of brokers. Using our proprietary scoring system for brand-location fit, Predicted Performance Value, Leap is able to compare potential locations based on brands’ shopper profile, local demographics, seasonality, and more to predict how well they will perform in different locations. Once we find locations that meet this criteria, we share location packages with the brand for review and approval. When approved, we handle all of the negotiations through lease execution and the ongoing landlord relationship.

How Has Commercial Real Estate Evolved in 2021?

The pandemic has had an undeniable impact on brick-and-mortar retail dynamics over the past year and a half. This means that finding a location for a new brick-and-mortar store has changed substantially—in some ways posing difficulty, in others, opportunity. To stay on top of this shifting market, we’re always looking at trends across the country, including rent comparisons, lease comparisons, demographics, and psychographics.

What this means on a market level is that the pace of leasing has noticeably increased. That’s good news for brands looking to open stores fast. However, this also means a marked increase in competition over the spaces available. Due to the halt in deals at the start of the pandemic, brands and landlords are looking to fit a year’s worth of deals into a six-month period.

For Leap, this has meant we can move quickly and prioritize building our own store clusters within cities and neighborhoods so more brands can start benefiting from the effects of brick and mortar retail as soon as possible. 

How Leap’s Approach to Real Estate Benefits Brands

Finding, negotiating, and securing property is a full-time function that takes experience and connections to be truly successful. Leap takes almost all of that work out of the hands of the brands on our Platform. There are a number of distinct advantages our Platform can offer:

Data-Driven Site Selection

By correlating our internal data with each brand’s ecommerce and store data, as well as their own preferences and input, we are able to present only the most relevant properties that present the highest probability of success.

As our Director of Real Estate Rebecca Fitts describes, “We’re true experts in this space, and we’re on our way towards opening 200 stores a year using data-based site selection. The brands on our Platform don’t have to look at 500 spaces, or even 5 spaces, to find the right one.”

Brand-Centric Design

Brands come to Leap because they want a brand accretive store. Every space is unique and reflective of the brand itself. This approach informs how we choose and work within properties as well. Because our property choices are tightly based on profit projections and brand budgets, we are a less wasteful and more pragmatic way to build a great store.

We can state confidently that a store will be successful in the right location even if the rents there are higher, or allocate more budget to create a store that truly stands out in a new shopping district. Because of our shared efficiencies across stores on our Platform, we are able to underwrite these stores in ways that brands can’t on their own. 

Powerful Risk Mitigation

Because we sign and hold leases for every property Leap-powered stores operate in, we take on the majority of the risk. This lowers the barrier to entry for retail brands that have everything they need to be successful, but simply aren’t in the position to comfortably sign a five or ten year lease in a prime retail corridor. We also manage all relationships with landlords, allowing us to do things like negotiate rent abatement at locations across our Platform at the start of the pandemic. 

We have the knowledge, resources, and training to put great brands in prime locations, and our brands have the product, story, and deep customer relationships to be successful.

How Leap’s Approach to Real Estate Benefits Landlords

Leap helps landlords by activating retail spaces, reducing churn and preventing the risk of vacancy. Together, we partner with landlords to build a slate of incredible retail locations for modern brands while limiting vacancies and risk.

Reduced Vacancy Rates

Not only does Leap handle all long-term lease liabilities and CapEx for brands, our pipeline of quality brands backfill any given space, protecting landlords from churn. When property owners sign with Leap, they are gaining access to dozens of potential brands that could fill their available properties.

Winning Stores

A well-run store is a winning store. Our data-driven Platform optimizes store operations, increasing a brand’s chance to become profitable, faster. All stores are staffed by trained and experienced associates and managers, and marketed to potential shoppers via local activations and our own customer file.

Viable Tenants

Our modern brands ensure high foot-traffic and attract valuable customers to properties in a variety of locations and markets. Our Platform assesses all brands based on their own ecomm data, insights from other powered by Leap stores, market intelligence, and our proprietary financial modeling. This greatly increases the odds of success for the brands that we put in every location on our Platform.

Shared Efficiencies

We drive store performance by clustering multiple stores in the same corridor to create operating efficiencies that ultimately drive down operating costs and increase sales. This means we can partner with landlords to fill a wide range of local vacancies, while ensuring that the more stores we open in a market, the more successful they’ll all be.

Premium Locations for Modern Brands

There is no shortage of variety in the brands, locations, and properties we work with. Whether the stores on our Platform are at the heart of a downtown shopping district, in a premium outdoor shopping center, or in a seasonal destination, our approach helps us find the right brand-market fit to make retail work. As our Director of Real Estate put it: “We want to be in every major retail corridor and A-level shopping center across the country.”

Have a property you think is right for the Leap Platform? Reach out to our property team here.

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