Seasonal Halloween shops learn the real estate shuffle

Dale Howe knows better than most that the business of Halloween is tricky.

The Haunted Experience in Bear | Photo by Ron Dubick

As the owner of The Haunted Experience in Bear — the last independent seasonal costume shop in Delaware — he’s learned to navigate a constantly changing retail landscape, in which rents rise and fall, shopping strips change major tenants, and landlords shift priorities to meet demand.

Howe’s shop is one of several seasonal costume outlets that pop up in formerly vacant storefronts across the state between late August and early November. These seasonal operators start planning months in advance and work closely with local property owners to find spaces that are big enough and affordable enough to meet their needs.

That often means looking at properties other retailers may have ignored.

“Because you’re looking for a fairly large location, usually you’re looking at shopping centers that are on their way out,” said Howe, who has been located in Glendale Plaza on 1100 Quintilio Drive for the last two years.

Howe has hopped locations several times since opening his business a decade ago. They have ranged from declining shopping strips to long-vacant road-side storefronts that, for a few months at least, Howe gives a fresh face.

“What usually happens is that other people begin to see it’s a viable spot and then express interest to the landlord,” he said.

Indeed, that very thing could happen next season. Howe said talks are under way to lease the location to a long-term tenant, though nothing is nailed down as far as he knows.

Masks line the walls at The Haunted Experience | Photo by Ron Dubick

Smaller locations are the most available, he said, but costume stores thrive in the 6,000-8,000-square-foot range.

“You find a lot of these like 4,000-square-feet locations, but those middle-range ones are harder to find,” Howe said.

Bankruptcies in the retail industry have opened up a number of big-box stores, such as Toys R Us, but with size comes higher rents. Howe said he pays an average of $1 per square-foot, and that his current rent to Delle Donne & Associates is about $7,000.

National chains also participate in the seasonal shuffle for real estate.

Halloween City and Spirit Halloween, owned by Party City and Spencer’s Gifts, respectively, dominate the industry, but they still have to navigate the annual uncertainty of nailing down a location in a shifting real estate market.

Frank J. Vassallo IV, president of Fusco Management in New Castle, which works with independents and corporate stores alike, said he starts to get emails or calls about the upcoming season as early as May. He agreed that seasonal stores are often a win-win for landlords and tenants.

“They really help landlords or owners who may have a transition going on,” said Vasallo. “When things are 100% occupied, they don’t have the opportunity to come to markets.”

This year, Fusco has one seasonal tenant, Spirit Halloween, at the College Square shopping center in Newark. The property is set for a major redevelopment, Vassallo said, but in the meantime Spirit is a great fit.

The usual commercial lease is five years. With a three-month lease, Vassalo said, the rent is necessarily higher, but that’s the cost of flexibility.

Fusco also manages the property of Costume Cabaret on Kirkwood Highway outside Wilmington. The store operates year-round, but pays significantly lower rents during the off-season. The arrangement is designed to keep the space occupied while accommodating the store’s seasonally-focused model.

Vassallo said the rent is higher during the three months of the Halloween season than the rest of the year combined.

Bruce Goldman, owner of Costume Cabaret and founder of Halloween Adventure — one of the original seasonal costume outlets, launched in 1981 and expanded across the country — said he keeps his store open year-round to better retain employees and improve customer service.

“I’ve had thousands of stores, thousands of stores in my lifetime, and you want to have people there for you when you need them,” he said.

But Goldman understands the value of the seasonal model in meeting demand.

“There’s no one way of doing things,” he said.