What Retail Apocalypse? Shopping Centers Are Making a Comeback.

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Shopping center landlords have found themselves in a wholly unfamiliar position: For the first time in 20 years, demand for retail space outstrips supply. That demand has soared recently and, after years of muted construction and a purge of weak-performing properties, met a retail market with less available space. Properties that survived the purge signed up tenants that would draw more shoppers and give them more reason to linger. That meant more restaurants and venues that promote recreational experiences, like ax throwing and, more recently, pickleball. It also meant less space for traditional retailers that weren’t performing as well, like bookstores and apparel brands. Because of those moves, “there’s not as much redundancy from tenants, and landlords are creating much more robust tenant mixes,” said Barrie Scardina, president of Americas retail services, agency leasing and alliances for Cushman & Wakefield, a real estate firm. “We are seeing some of the most productive occupancy recorded in the last 10 years.” Shopping center vacancy is the lowest it has been in two decades, at 5.4 percent, Cushman & Wakefield said in a recent report, and the edge in lease negotiations has shifted from tenants back to landlords.