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Blowdryers and Flatirons: The Real Estate Market Heats Up with Salon Suites

For years the price of entry for solo entrepreneurs in the health and beauty category was high. With similar fixed startup costs as any professional practice would have, such as real estate, insurance, supplies, but with much slimmer profit margins, stylists and aestheticians were often relegated to renting chairs from established salons or working for well-established day spas. In both these business models, practitioners are completely tied to the hours and the mode of operation of the employer, often left with little room for creativity or the ability to really drive brand loyalty with customers.

However, these existing business models are changing: a new option in commercial real estate is popping up across the U.S. and in Canada, capitalizing on the increasing health and beauty concerns of consumers in cohorts ranging from Millennial men to aging baby boomers. They’re called “salon suites” and these new spaces offer practitioners from hair stylists to massage therapists to aestheticians the opportunity to pursue their dreams of entrepreneurship. For landlords, salon suites capitalize on the spending and leisure habits of a population on-the-go, working more (or less) hours and seeking to de-stress with greater frequency.

According to industry trend watchers, health and wellness is becoming intertwined with the conversation about beauty and appearance. Fewer consumers are buying high-end makeup products from department store counters in favor of seeking out the personal experience and the ability to unplug and recharge a bit. Many are seeking the undeniable boost that comes from a good facial, a rigorous massage, a challenging yoga class or a pampering hair treatment. And as consumers make these activities increasingly a regular part of their routine, it’s only natural that these services become integrated into weekly activities and need to be more accessible. Rather than a special “trip to a luxury spa”, consumers need to know they can get in to see their favorite practitioner without hassle and then resume the rest of their day.  Responding to this growing demand enters the salon suite – a place where budding entrepreneurs can service their clientele without the tangle of bureaucracy or the layers of corporate involvement.

Most of the facilities called salon suites are move-in ready, and depending on what the landlord has projected for the mix of occupancy (hair stylists to yoga instructors to aestheticians) there are usually different options from which the lessees can choose. Each business has its own concerns for lighting, ventilation, soundproofing, and equipment so within a complex, there may be multiple options priced at different points. For a hair stylist out on his or her own for the first time, it can be as easy as turning the key and flipping a light switch to find a fully-appointed salon. While it may be plain vanilla décor, it will be complete with proper lighting, mirrors, a washing station, stylist chair and basic amenities – in addition to a concierge to greet and direct clients on their way to the appointment. Veteran practitioners seeking a more sophisticated way to express a personal brand can take what the landlord has offered and customize it in a variety of ways from paint to minor renovations, such as knocking down walls to create larger stations and other cosmetic changes.

While the salon suite is a new and growing trend and some of the work is already done for tenants, potential lessees and landlords still need to treat the conversation with the same due diligence they would if it were starting from scratch. Read our team’s point-of-view on how to prepare to negotiate a first commercial lease from a recent article in BusinessNews Daily.

Salon suites are taking hold quickly. The health and beauty obsession does not seem to favor one geography either; from the largest urban centers in the southeastern U.S. to midsized cities and major markets, developers are working hard to satisfy consumers’ growing interest in self-improvement. Industry sources say salon and spa businesses are well-positioned for revenue growth in 2015, so it appears this trend isn’t vanishing as quickly as the fine lines will after a great facial!

Related topics: Landlords, Leasing, Real Estate, Retail, Tenant