Latest / Influencer Marketing with Fexingo: Creators, Sponsorships, and Modern Endorsement Deals / How Creators Are Buying Their Own Malls
Transcript
- Lucas: So Luna, you know how every creator has a merch line and a podcast studio and probably a venture fund at this point. Luna: Yeah, and a law firm, apparently. We've covered all that. Lucas: Right. So the next logical step is obviously buying a mall. And I'm not being facetious. There's a real trend of creators buying physical retail spaces, and I've got a concrete example that's been sticking with me. Luna: Okay, I'm intrigued. Who are we talking about? Lucas: So there's a lifestyle influencer, I'll keep the name vague because we haven't confirmed all the details publicly, but she has about 4 million followers across Instagram and TikTok. She bought a small shopping center in Ohio, about 40,000 square feet, for around 6 million dollars. And she's turning it into a rotating hub for pop-up shops, brand experiences, and community events. Luna: Six million dollars for a shopping center in Ohio? That sounds like a bargain, but also a huge leap from selling sponsored posts. Lucas: It is a leap, but it's actually a calculated one. She's not the only one doing this. There's a broader movement of creators buying physical spaces—boutique hotels, coffee shops, even entire streets in some cases. The mall thing is just the most visible because it's so counterintuitive. We spent the last decade watching malls die, and now creators are buying them. Luna: And why would they do that? I mean, foot traffic at malls has been declining for years, even before the pandemic. Lucas: Right, but the economics have shifted. She's not buying a dying regional mall anchored by a Sears. She's buying a small, well-located strip center in a town that has a strong local community but no gathering space. And she's using her audience to drive traffic. When she announces a pop-up event, her fans show up. The mall becomes a destination, not just a place to buy things. Luna: So it's like she's creating a physical extension of her brand. But how does that make financial sense? I mean, six million dollars is a lot of money, and malls have high maintenance costs. Lucas: That's the thing—she's not relying on traditional retail tenants. She's renting out spaces on short-term leases to other brands and creators who want to do pop-ups. And she's charging a premium because she can guarantee foot traffic. Her last event, she did a weekend wellness fair, and she had over 8,000 visitors. That kind of draw, brands will pay for. Luna: Eight thousand visitors in a weekend? That's impressive for a small town. So she's essentially become a landlord and an event promoter at the same time. Lucas: Exactly. And she's not alone. There's another creator, a fitness influencer, who bought a warehouse and turned it into a boutique gym and recovery center. And a gaming creator who bought an old movie theater and converted it into a gaming lounge. They're all using the same playbook: own the physical space, control the experience, and monetize the community. Luna: It's almost like they're returning to the old model of the department store magnate, but with a social media engine. But what about the risks? I mean, what if the trend fades? What if her audience moves on? Lucas: That's the big question. And it's why these deals are structured carefully. She bought the property through an LLC, and she's using a professional property management company. She's also diversifying her sources of income within the space—rent, event tickets, merchandise sales, and even a small café. So even if her personal brand cools off, the physical asset retains value. And she's betting that the community will support it beyond her fandom. Luna: But you still need to attract and retain tenants. And in a small town, that's not always easy. How's she handling that? Lucas: She's being smart about it. She's not just renting to anyone. She's curating a mix of local businesses and brands that align with her aesthetic. There's a local coffee roaster, a plant shop, a vintage clothing store. And she's offering reduced rent for local entrepreneurs who might not otherwise afford space. In exchange, they commit to being open during events and hosting their own activations. It's a symbiotic relationship. Luna: That sounds almost like a community center with a retail component. I bet that generates a lot of goodwill. But let's talk numbers. What kind of returns are we looking at? Lucas: Well, she's not releasing financials, but based on typical lease rates and event income, industry analysts estimate she could be looking at a gross revenue of around 1.2 million dollars a year from the property. That's a 20 percent gross yield on her initial investment, before expenses. Not too shabby for a 'dead' mall. Luna: Wait, 20 percent? That's way above the average commercial real estate yield. Are those numbers realistic? Lucas: Well, they're estimates, and they're on the optimistic side. But remember, she's not a typical landlord. She's bringing an audience, and that's valuable. She can charge higher rents and fill spaces faster because she has built-in demand. That's the creator advantage in physical retail. She's not just selling products; she's selling an experience and a community. Luna: So what does this mean for the broader retail landscape? Are we going to see more creators buying dead malls and bringing them back to life? Lucas: I think we're already seeing it, but it's going to be selective. Not every creator can pull this off. You need a highly engaged audience, deep pockets, and a willingness to take on the operational burden. But for the top tier of creators, this is a smart move. It's a hedge against the volatility of social media algorithms. You can't be deplatformed from your own building. Luna: That's a powerful point. It's like they're buying permanence in an ephemeral industry. But there's also a risk of overextending. I imagine managing a physical property is a lot different than managing a brand deal. Lucas: Absolutely. And we've seen creators fail at this too. There was a YouTuber who bought a restaurant a few years ago and it closed within a year because he didn't have the operational expertise. But the ones who are succeeding are partnering with experienced real estate professionals and treating it like a business, not just a vanity project. Luna: So what's the takeaway for our listeners who might be considering something similar? What's the first step? Lucas: I'd say, start smaller. Don't go out and buy a mall. Maybe lease a small retail space for a pop-up. Test the waters. See if your audience actually shows up in person. And if they do, then think about a more permanent commitment. But also, do your due diligence on the location, the foot traffic, the demographics. It's not just about your brand; it's about the market. Luna: That's solid advice. And you know, it's funny, we've talked about creators buying ad servers, insurance brokers, even law firms. But this feels different. It's almost like they're becoming the anchors of their local communities. Lucas: It is. And it's a reminder that the creator economy is maturing. It's not just about content anymore. It's about building sustainable businesses that can outlast any single platform. And owning a physical space is a huge part of that. Luna: Before we wrap up, Lucas, I know we talk a lot about the business side of things, but I just want to mention something. We keep this show ad-free because we value the conversation over the interruptions. If that matters to you too, and you want to help us keep it that way, there's a simple way to support us. You can buy us a coffee at buy me a coffee dot com slash fexingo. Lucas: Yeah, it's a small thing, but it genuinely helps us keep the lights on and the podcasts free of ads. We're grateful for anyone who does that. Luna: And we're back to the topic. So, Lucas, you mentioned that creators are becoming anchors. Do you see this as a long-term trend or just a passing fad? Lucas: I think it's here to stay, but in a more nuanced form. We're going to see a bifurcation. The top creators will own assets, including physical spaces. The mid-tier will rent or partner. And the lower tier will still be chasing algorithms. But the ones who own their distribution and their physical presence will be the ones who endure. Luna: So it's almost like the creator economy is becoming more like the traditional economy, with the haves and have-nots. Lucas: Exactly. And that's not necessarily a bad thing. It's a sign of maturity. It means the industry is stabilizing, and we're seeing real businesses being built. And the mall is just the latest symbol of that. Luna: Well, I'm excited to see how this develops. Maybe we'll see a creator-owned main street next. Lucas: Stranger things have happened. And if they do, you heard it here first.