As holiday decorations come down from Halloween and the twinkle lights for Christmas flicker on, the retail and entertainment sectors find themselves gearing up for one of the busiest periods of the year.
This annual transition underscores not only consumer enthusiasm for the holiday season but also the immense opportunities and pressures it places on commercial real estate. For retail and entertainment spaces, October to December is a critical period for driving sales, attracting foot traffic, and enhancing tenant mix.
Halloween’s Retail Dominance
Halloween has evolved into a significant economic force, now valued at nearly $12 billion in the U.S. Halloween’s focus on experiences—whether through haunted houses, costume parties, or seasonal pop-up stores—makes it a pivotal moment for the retail and entertainment real estate markets.
One of the most notable examples of Halloween’s retail dominance is the rapid expansion of Spirit Halloween stores. With over 1,500 locations nationwide, Spirit Halloween has become synonymous with seasonal pop-up retail. Each year, the company transforms vacant storefronts, former big-box retail spaces, and even short-term lease properties into thriving hubs of Halloween merchandise. This model not only capitalizes on the growing consumer demand for costumes, decorations, and party supplies but also provides property owners with an effective way to generate income from spaces that might otherwise remain unoccupied.
Black Friday, Cyber Monday, and the Holiday Spending Frenzy
The weeks between Halloween and Christmas is the most significant shopping season of the year. Forrester projects holiday sales to reach $1 trillion in 2024, a 3.7% year-over-year increase.
Despite the rise in e-commerce, brick-and-mortar shopping remains a crucial aspect of the holiday season. Shopping centers create experiences that combine convenience with holiday festivities, such as Santa meet-and-greets, winter wonderlands, and festive decor.
New data shows visits to indoor malls, open-air shopping centers and outlet malls in October were back on par with 2023 levels. The year-end shopping season is projected to beat out last year and align with spending seen in pre-pandemic shopping seasons. Overall, per Bisnow, the national retail availability rate remained at a “decades-low” 5% in the third quarter and has held steady since Q4 2023 due to strong demand and a shortage of available space.
Trends Shaping Holiday Real Estate
With rising consumer expectations for holiday experiences, there’s a growing trend toward immersive environments that go beyond traditional retail offerings. Whether it’s a haunted house in an old warehouse or a Christmas village in a suburban shopping center, these environments require careful planning from both developers and tenants.
Landlords are increasingly willing to adopt flexible leasing models that cater to short-term, experience-driven tenants. This approach not only maximizes foot traffic but also builds a strong reputation for the property as a destination.
Gen Z and millennials are spending more than Gen X and baby boomers and are driving a resurgence in in-store traffic as they seek engaging and interactive experiences. They also expect smooth and tech-enhanced shopping. To this end, malls and shopping centers are merging online and in-store experiences, leveraging technology to offer click-and-collect services, mobile payments, and real-time inventory tracking.
Holidays as an Economic Driver
For commercial real estate, the holiday season is more than just a series of celebrations; it’s an economic powerhouse. Halloween and Christmas boost retail and entertainment property value by driving foot traffic, maximizing space utilization, and attracting tenants looking to capitalize on seasonal demand. Real estate investors and managers who stay ahead of these trends will find significant opportunities to benefit from the holiday season’s robust spending.
