Retail Real Estate Remains Stable

While many have feared the decline of retail real estate, the numbers show that the sector remains stable despite changes, according to Integra Realty Resources Commercial Real Estate Trends Report for 2025. 

“America’s retail sector has transformed significantly in the last two decades,” the report reads. “Traditional big box anchor retailers have given way to smaller, agile stores embracing omnichannel methods and high-quality in-person experiences that complement online shopping.” 

Although the retail sector has seen relatively flat vacancy rates, rent growth and inventory growth, the numbers suggest stability, which is a positive thing, especially after the pandemic and other economic challenges. 

Consumer spending remains strong, and many retailers have been able to continue thriving. 

“Given the shift to e-commerce, it’s unlikely we’ll see the level of growth in the retail sector that existed when big-box mall anchor stores thrived,” the report notes. “The trends for 2024 suggested that there are still winners in the retail space. In particular, stores that leverage in-person experiences benefit from widespread development trends focusing on mixed-use developments that suit today’s customers.” 

While many other sectors continue to adjust to post-COVID changes, IRR observes that retail trend data suggests the market is near equilibrium. 

The most recent national retail rates were: 

• Cap rate: 7.18% for community retail; 7.19% for neighborhood retail 
• Discount rate: 8.49% for community retail; 8.51% for neighborhood retail 
• Market rent ($/square foot): $22.02 for community retail; $19.91 for neighborhood retail 
• Vacancy rate: 10.24% for community retail; 10.77% for neighborhood retail 
• Q3’23-Q3’24 cap rate: down 6 basis points for community retail; down 5 bps for neighborhood retail 

For the eastern region, the rates were: 

• Cap rate: 7.38% for community retail; 7.48% for neighborhood retail 
• Discount rate: 8.50% for community retail; 8.69% for neighborhood retail 
• Market rent ($/square foot): $23.22 for community retail; $21.57 for neighborhood retail 
• Vacancy rate: 11.03% for community retail; 9.88% for neighborhood retail 
• Q3’23-Q3’24 cap rate: up 14 basis points for community retail; up 16 bps for neighborhood retail