The right real estate is critical for your retail business. Even with the growth of online shopping, the brick-and-mortar approach still brings value to consumers. Data from CapitalOne Shopping found that global in-store retail sales reached $24.2 trillion in 2024, with projections showing it will reach $28.3 trillion by 2030. In the U.S. alone, brick-and-mortar stores experienced an average daily revenue of $16.2 billion throughout Q1 2025.
The retail landscape is rapidly shifting, shaped by changing consumer behaviors, technological advancement, new supply chain innovations and progressive trends. This requires that you stay agile in your approach and keep up with the evolving expectations of today’s consumers.
In this article, we look at the current state of retail real estate and discuss four key trends making waves in this space.
Download: Maximizing Retail Success in 2025: How to Optimize the Full Real Estate Life cycle
Retail Real Estate Has Supply Challenges but Remains Resilient
During Q2 2025 the retail vacancy rate in the U.S. was 4.3%. High demand for physical real estate paired with a low supply of quality space is a large part of what’s driving the low vacancy rates. Retailers are leasing space faster than before, which means you have competition to go up against.
Looking at supply, there were only 30 million square feet of retail space delivered in 2024, compared to 52.3 million in 2023. It’s not surprising given the increase in financing costs, less availability of capital and elevated input costs for things like land and materials. We’ve also seen more than 130 million square feet of obsolete retail space demolished over the last several years.
Still, with technology innovation and growing adoption, brick-and-mortar retail real estate remains resilient. Assets are expected to have steady performance in 2025, with moderately positive rent growth for community shopping centers and stable, unchanging vacancy rates. Neighborhood centers are emerging as an alternative to bigger shopping malls and it’s smart for retailers like you to consider new formats and approaches for enticing consumers to come in-store.
4 Trends to Propel Your Retail Real Estate Portfolio in 2025
To take advantage of the current retail real estate landscape, you should consider three things:
- How you select space
- Where it is
- What you put in those spaces
The goal is to be adaptable to shopper expectations and preferences. Read on for four retail real estate trends making big waves in the market and addressing these considerations.
Related Read: The Top Trends Influencing Retail in 2025
1. Flexible, Tech-Enabled Spaces
As consumer needs and business models continue to evolve, retail spaces are being developed with adaptability in mind. Your shoppers increasingly expect thoughtful experiences tailored to their personal interests. Personalized interactions are a must, and to do this well, you need the right technology to support those efforts.
Creating memorable experiences for consumers and nurturing more engagement with them requires immersive brand environments that they want to interact with. If you aren’t already, you should be looking to implement in-store digital displays that can provide personalized recommendations for each shopper. You can also draw more customers with in-house delivery services, shoppable media and seamless integration between online and in-store channels. These will be crucial going forward as you look to build shopper experiences that will be memorable.
2. Growth in Suburban Areas and the Sun Belt
Demand in suburban areas and Sun Belt cities is rapidly growing. This doesn’t mean urban centers aren’t still important to your retail real estate footprint, but it does mean that suburbia and the Sun Belt region should be part of your space planning. Populations in these areas are growing, creating a call for urbanization. The higher demand for more convenient access to grocery stores, entertainment spaces, apparel retailers and more makes these markets prime for you to expand in.
3. Mixed-Use Developments
Retail real estate focus in 2025 is increasingly turning toward mixed-use developments that include retail, residential and office space. These developments present a way to attract residents and office workers to spaces they may not venture out to if they didn’t live or work close by. With demand growing and retail real estate vacancy declining, well-located and convenient spaces are how you keep your portfolio resilient.
Developers and property owners are more focused on assets that can bring in consistent revenue, especially as construction costs stay on the rise. Because of this, they are increasingly prioritizing mixed-use projects. Combining retail with residential, entertainment and office facilities uniquely caters to how the needs of communities and consumers are evolving.
4. Data-Informed Site Selection
You want the best space and that requires making smart decisions about site selection. To do this, you need strong data and analytics that can support informed decisions about where to rent or buy. From foot traffic to local demographics to specific consumer behaviors, you must use the data to paint a picture of what you need to provide in your real estate space to get shoppers in the door. This also helps you identify what locations are the most promising and ways to optimize any expansion strategies.
Related Read: Strategic Growth in Retail: The Power of Site Selection and Construction Project Management
Operate More Efficiently and Gain a Competitive Edge
To effectively manage your retail real estate portfolio as the market shifts you need to adopt the right technology solutions, maximize your space(s) and streamline data management. Take a holistic approach centered around strategic decision-making, lease management, compliance and control of your expenses.
Getting yourself into prime locations and offering top-of-the-line services and experiences will make your retail brand stronger, even in the face of inflation, tariffs and store closures across the U.S. Adaptability is key and leveraging the right technology is your imperative.
Interested to know more? Our latest eBook shares an interconnected approach that can help you unlock the full potential of your retail real estate management and portfolio.
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