Office-in-Retail: The Convenience Factor

Following the lead of retail banking chains, real estate brokers are opening shop in supermarkets and malls.

June 1, 2010

Ranch dressing or ranch homes? Condiments or condos? At grocery stores around the country, shoppers are finding more than the usual selection of foods and household goods. Now they can also buy homes.

Brokers are staking out space in supermarkets to increase their visibility and make their office more convenient for consumers.

"It’s nice to have big office locations, but you’ve got to be where the people are," says Gerald Murphy, broker at Keller Williams Gold Coast in Chicago, who opened an office in a Dominick’s grocery store in 2009. "Dominick’s customers are our clients."

Expect to see more variations on the office-in-retail theme. "Because of the recession, the brokerage model needs a complete overhaul," says Sherry Chris, chief executive of Better Homes and Gardens Real Estate in Parsippany, N.J. "Many brokers are paying exorbitant rents on large spaces that are hardly even used by their sales associates. They’re starting to see that it makes sense to have a hub-and-spoke model, with a main office and satellites."

Small Space, Big Traffic

Murphy’s 300-square-foot office in a Chicago supermarket houses two computers, a desk, and some counter space. It’s open from 10 a.m. to 7 p.m. Murphy estimates it costs about half of what he’d pay for a 2,000-square-foot space, and it comes with free parking—a big bonus in downtown Chicago.

"It’s a nonthreatening environment where people can come up and feel comfortable asking questions," Murphy says. "We’re just trying to share information. A week hasn’t gone by that we haven’t got a listing or sale from the Dominick’s office."

In the Northeast, Jay Hummer, executive vice president of the 234-office RE/MAX of New England based in Natick, Mass., has signed an agreement to open outposts in 17 Stop & Shop Supermarket Co. locations in the next year. Each office will be 200 to 400 square feet and will be open about 50 hours per week.

"These grocery stores have huge foot traffic," Hummer says.

Hummer also plans to use the space to recruit sales associates.

"There might be a big sales team at another company that wants to branch out," he says. "It’s a great recruiting tool."

Beyond Grocery Stores

It’s not just grocery stores that are attracting micro real estate shops. Tricia Fox, head of the Tricia Fox Group at Keller Williams Gold Coast in Chicago, operated a kiosk at Shops at North Bridge—an upscale mall on Michigan Avenue—for about three months in 2009. She would have stayed longer had the rent not doubled.

"With today’s impersonal computer-based marketing, it gave us the chance to have what I call a ‘continual open house,’" she says.

Keith Nelson, CRB, designated broker at Better Homes and Gardens Real Estate Executive in Bellevue, Wash., is now paying about one-fifth the rent he used to pay on a 4,000-square-foot freestanding office. Now he operates a 1,200-square-foot space across the lobby from a restaurant in a mixed-use building near the city center.

"The trend is moving toward convenience centers," says Nelson. "People walk into the restaurant and see our door. Our visibility has increased, sales productivity is up, and the environment is positive. We’re engaged in the community."

freelance writer

G.M. Filisko is a Chicago area freelance and former editor for REALTOR® Magazine.