Mike Kelleher has spent the past decade building up the specialty-leasing program at Federal Realty Investment Trust. Indeed, revenues have increased by 500 percent over that period, he says. Now he wants to put his expertise to work as head of RevUp, a subsidiary he helped create and which will provide specialty-leasing services to other landlords and to retailers.
Specialty leasing is very different from permanent leasing, and many people in the industry are still struggling to figure it out, notes Kelleher. “It is not something you can do part-time and be successful,” he said. “It is a very specialized business, and it does take a full-time commitment from a team of people to make it successful,” he said. Thus, Kelleher is prepared to take on a dual role: as vice president of specialty leasing at Federal Realty Investment Trust and also as president of RevUp, which launched in October.
RevUp will employ its team members’ skills and industry relationships and use a proprietary database of tenants to help other property owners and managers exploit specialty-leasing opportunities and maximize revenues. The team currently comprises seven people in sales and administrative functions, with additional staff members to be brought in as the business grows. At any rate, RevUp will be working selectively with clients that are not direct competitors of Federal Realty. Generally, this will mean privately held local and regional shopping center owners in markets where Federal Realty has no presence, as well as retail tenants seeking to expand.
“It is always a plus to have a landlord who has some experience on the retail side”
Kelleher attributes his success in specialty leasing in part to an ability to understand the perspective of both the property owner and the retail tenant. He began his career at Foot Locker and spent eight years there before joining New England Development in 1990. He left the firm in 2001 to become general manager of Faneuil Hall Marketplace, in Boston. Faneuil Hall is where he got exposure to specialty leasing. “It was the birthplace of pushcarts, and as the top tourist location in New England, we had an interest in all forms of specialty leasing,” he said. Kelleher joined Federal Realty in 2007, initially as an asset manager. About a year later he began assuming specialty-leasing responsibilities and, as the program grew, he eventually went full-time with that work.
Some attribute Kelleher’s success also to a strong rapport with retailers. “He understands where we’re coming from,” said Frank Pacera, senior director of real estate at Spirit Halloween. “It is always a plus to have a landlord who has some experience on the retail side.” Pacera has worked with Kelleher on specialty-leasing deals for about 10 years. Spirit Halloween typically opens roughly a dozen pop-up stores at Federal Realty properties each year, and now the retailer is excited about the opportunity to do even more deals, through RevUp.
“When you take a concept that has done well in the online space and then help them to succeed in a bricks-and-mortar space, that is a win-win for everybody”
As specialty leasing has evolved, Kelleher has had a chance to observe it up close. “Specialty leasing plays a very important part in what the shopping center looks like today and what it will look like tomorrow,” he said. Specialty leasing has gone from pushcarts and kiosks to temporary tenants that occupy both common-area and in-line spaces. Those tenants run the gamut — from entrepreneurs and online retailers that want to try out brick-and-mortar to established retailers in need of temporary space for seasonal products or special promotions. Such tenants might pop up for a few weeks or stay for as long as three or four years, says Kelleher.
Pop-ups and temporary tenants can be an ideal way for property owners and managers to recruit new concepts that will bring fresh energy, create excitement and boost foot traffic, says Kelleher. “It’s really evolved to a major business, as opposed to just carts and kiosks in malls,” he said.
Perhaps one particularly timely element to all this is the frequently tense relationship between brick-and-mortar and online retailing. The retail industry has been at odds with e-commerce businesses, as characterized by an us-or-them mentality, says Kelleher, rejecting any notion that the two ever need to be mutually exclusive. “I don’t believe that; I think it’s all of us,” he asserted. “When you take a concept that has done well in the online space and then help them to succeed in a bricks-and-mortar space, that is a win-win for everybody.”
By Beth Mattson-Teig
Contributor, Commerce + Communities Today