The last day of the nation's biggest retail real estate conference is usually pretty quiet. But this year, landlord Brixmor Property Group's booth was bustling until the very last minute.
Many people had already left for home after attending the annual ICSC gathering at the Las Vegas Convention Center. But New York-based Brixmor, owner of open-air shopping centers, was working on a deal Tuesday for bookseller Barnes & Noble to lease a former Joann store at one of its properties, according to Brian Finnegan, the real estate investment trust's president.
"Barnes & Noble was at our booth literally right before they turn the lights off at the convention," David Gerstenhaber, Brixmor senior vice president, head of leasing, explained later on a company webcast. "We almost got kicked out. They had their whole real estate department, and they were begging us to help them fill their 2025 growth pipeline, 60 to 70 new stores — just super encouraging to see that."
After years of turbulence leading up to, throughout and after the pandemic, the retail industry has weathered uncertainty. This year, tariffs and a possible recession are looming. Nonetheless, roughly 25,000 retail professionals across the United States descended on Sin City to do deals despite the year's macro challenges.
Retail landlords like Brixmor and Macerich, as well as brokers, said that their takeaway from the conference is that there's activity, on the leasing and investment side. They said chains haven't done a widescale pullback on expansion plans, but rather in some cases are vying for space, despite any tariffs. Retailers are working to nail down their new stores for 2026 and 2027.
Demand from the grocery sector — such as Whole Foods Market, Sprouts Farmers Market, Trader Joe's, Publix, ShopRite and Aldi — is particularly strong, according to Brixmor. And apparel sellers — such as Victoria's Secret & Co., Ross Stores, Nordstrom Rack and Bloomingdale's, The Outlet Store, Tommy Hilfiger and Calvin Klein — are looking to roll out new locations.
On the flip side, the industry is still monitoring how the impact of tariffs plays out. Marcus & Millichap CEO Hessam Nadji was specific this week in telling CoStar News in a video interview that about 50% of investors that the firm tracked has sat on the sidelines after shifts in U.S. tariff policy hit earlier this year, but that others were looking to "pounce" during the turmoil in an aggressive posture that seemed to be noticed by a number of attendees.
Landlords maintain that despite the hundreds of stores being left vacant by bankrupt chains, such as Rite Aid, that space will be leased because the retail vacancy rate is so low. But that isn't an overnight process, and retail real estate investment trusts have already seen dips in their occupancy as chains like Forever 21 liquidate and leave empty stores. Landlords are undaunted.
"This year is as busy and productive as any in recent, post-pandemic years, despite some economic uncertainty," Michael Guerin, the executive vice president of leasing for Santa Monica, California-based Macerich, told CoStar News. The national mall landlord and others throughout "the shopping center industry continue to experience strong retailer demand and are continuing to sign new leases and open new stores, restaurants and experiences."
Meetings and mingling
Over the course of the three-day ICSC event, tenants, landlords and brokers huddled in makeshift conference rooms or over drinks at the nightly cocktail parties to find some middle ground for a supply-demand imbalance that has fueled competition over a dwindling amount of space. Brixmor alone had 700 meetings in Las Vegas.
Limited construction over the past several decades has meant retail availability is hovering near historic lows, and with a relatively barren level of development, a parade of tenants from Starbucks and McDonald's to Planet Fitness and H-Mart at this year's conference were all hungry for space.
Even with a slew of recent bankruptcies over the past several months, tenants signed on for more than 55 million square feet through the first quarter of this year, according to CoStar data. That volume is expected to climb throughout the year despite concerns over store closings and an increasingly bearish economic outlook, something Macerich sees as a signal of the strength of the retail market and its ability to quickly adapt in the face of unexpected turmoil.
"Leasing and tenant interest has remained robust over the past year, and retailer sentiment is strong," Guerin said. "The retailer environment overall remains healthy, with the best brands remaining nimble and flexible to navigate changing economic conditions as they arise. So, when brands like Forever 21 leave our properties, Macerich is readily able to replace them."
Macerich already has commitments or letters of intent to backfill about 60% of the space Forever 21 — which filed for bankruptcy in March — had occupied across its 43 million-square-foot portfolio, Guerin said. What's more, incoming tenants will be paying higher rents, a sentiment other landlords at this year's conference echoed as the upside to the recent wave of closures among companies such as Party City, Big Lots, Joann, among others.
Space over uncertainty
While few would say they were expecting a rosy outlook, a majority of retail professionals have said they have yet to feel the impacts of concerns such as tariffs, inflation or a possible slowdown in consumer spending.
Even so, that doesn't mean they aren't watching.
"It's so hard to say right now what will happen," Ali McEvoy, a partner at San Francisco-based retail brokerage Maven Commercial, told CoStar News. "At the beginning of the year we saw a huge uptick in touring and interest and proposals on space, and those haven't died, but some have started to move a bit slower over the past month. There's a story emerging as people try to understand if tariffs will happen and to what degree it could impact their business, so there's definitely a lot of cautious optimism."
In meetings with prospective retailers and clients, CBRE Senior Vice President Alex Sagues said tariffs dominated most of the ICSC-related conversations, even if those talks ended with widespread uncertainty as to their potential impacts. Even so, it hasn't been enough to slow most companies' long-term plans.
"Some retailers that had put requirements on hold are moving them forward now," he told CoStar News, adding that there are a few that are still waiting for a bit more clarity. "Retailers need certainty to sign five to 10-year leases, so uncertainty can be difficult."
Yet with high-quality retail space at record-low vacancies, the urgency to move on whatever availabilities they can find is largely outweighing any hesitation over the macroeconomic outlook, according to Sagues. A majority of tenants can't find spaces in the markets they want, Sagues said, with some retailers even asking landlords and developers to build or buy new centers to solve that severe shortage of options.
"There has been more discussion about building new centers than I have ever heard," the broker said. "Retailers are asking landlords, 'We can't sign a lease in any of the existing centers because there is no space or co-tenancy is poor. Can you please build or buy a center there?"'
Brixmor said it saw a surge in demand from grocers at the conference: "Our pipeline with Publix is the biggest it's ever been," Gerstenhaber said on the REIT's webcast. Even Walmart, which "really hasn't been active in our portfolio lately, was at our booth looking for deals," seeking locations for its small-format neighborhood stores, Gerstenhaber said.
Evie Gross, Brixmor's vice president of national accounts, on the webcast said there also were a lot more lease discussions with fashion retailers. That included Victoria's Secret, a chain expanding into open-air lifestyle centers, according to Gross. For example, the lingerie seller plans to lease space at Brixmor's Roosevelt Mall in Philadelphia, a property that's being redeveloped.
Gross said Brixmor also met for the first time ever with PVH, the parent of the Tommy Hilfiger and Calvin Klein brands: "They've just turned on an open-air expansion plan to do 30 to 40 new deals a year for their two companies. As they're seeing the wholesale business shrink a bit with some of the Macy's stores closing, they really want to establish a full-price model and presence in the United States because right now they're only in outlets."
Nicole Larson, National Research Manager for Retail Services at Colliers, did a report with the firm's "Top 10 Key Takeaways" from the conference, saying that leasing momentum remained strong, particularly at open-air shopping centers.
"Retailers are reoptimizing, not retreating," according to Larson, with site selection "more strategic than ever."
Apart from leasing, retail investment activity is heating up, Larson said.
"Investment firms and REITs are shifting focus to retail as office and multifamily markets remain turbulent," she said. "Capital is moving toward necessity-based and experiential retail, albeit cautiously, amid valuation challenges."
Overall, the retail industry is optimistic, "with a dose of caution," Larson concluded.
"While concern lingers over tariffs, rate hikes, and consumer pricing sensitivity, most retail leaders remain optimistic," she said. "They’re focused on transformation, and making strategic moves to drive community, connection and commerce."