Backed by $25 million in investment by Raymond James Capital and other shareholders to push expansion, Columbus, Ohio-based Salon Lofts is actively looking for leasable space in Greater Orlando's upscale submarkets, the company's real estate manager told GrowthSpotter.
Founded in 2003, Salon Lofts now has 65 locations across nine states, with 10 currently on Florida's west coast between Tampa and Sarasota. Orlando's consistent job and residential growth has made it a priority new market for the company, said Gary Schulte, real estate manager with Salon Lofts.
"All the metrics of Orlando show it to be an ideal market for growth, and a natural extension for us eastward from Tampa," Schulte said. "We spent a few days driving around the area after (ICSC Florida & Deal Making) last week, and we have a few sites of interest in which, if the economics work out, I'm sure we'll be making offers on."
The company's concept is to develop 4,000 to 5,000 square feet of contiguous space, with that broken up into as many as 25 individual loft spaces that are built out for haircare, nail, skin and massage professionals. Shopping centers, second-generation outparcels and office building second floors are typical locations for a Salon Lofts.
Schulte is looking for property in Winter Park, Winter Garden, Altamonte Springs and Lake Mary, areas he said fit Salon Lofts' target demographics for upper middle class. But the Dr. Phillips area ranked above all others in the company's demographics study.
"We ran our demos, and Dr. Phillips had the highest median household income around, which correlates strongly with our business model," he said. "Retail space is very expensive (in Dr. Phillips), and we're finding it difficult to identify opportunities there."
With an investment of roughly $600,000 to build out the complex plumbing and HVAC needs of each loft space, the company then leases those lofts to veteran service providers with an established clientele.
Users pay a flat monthly rent for Salon Lofts space and keep 100 percent of the revenue from their clients. That's in contrast to beauticians typically paying a 50 percent commission on sales to salon owners when they rent chair time with a salon.