FINANCIAL HIGHLIGHTS
VACANCIES AT ALL TIME LOWS
Due to non-existent development over the last 10-15 years and the removal of lower quality malls and non-performing retail centers, vacancies have trended to a nearly 20 year low and are expected to remain below historical RAFS due to the strong retailer growth projected to occur in the coming years.
New supply was historically low in 2025 with just 10.2 msf of new retail space coming online for the year, an all-time low and 63% below the 2015- 2019 average. Tariff cost pressures exacerbated an already subdued construction market, dampening the economic feasibility of new development and reinforcing the supply-constrained environment that has prevailed since the pandemic. However, retail’s resilience is gradually gaining more attention from developers, and the under- SUPPLY CONSTRAINTS PERSIST BUT THE PIPELINE SLOWLY IMPROVED
Rancho las Palmas - Rancho Mirage, CA
construction pipeline of 12.7 msf is the strongest in five years. Neighborhood centers are driving the majority (8.5 msf or 67%) of this construction activity, reflecting continued demand for convenience- oriented, community-serving retail formats that have proven most resilient to e-commerce pressures and demographic shifts. Nearly 50% of all store openings, by square footage, came from discount stores, grocery retailers, and convenience stores typically located in neighborhood centers. Even so, new development is not expected to surge anytime soon, and the pipeline still represents just 0.3% of existing inventory, down from the 0.6% long-term average.
33 AlbaneseCormier® | 2025 Annual Report
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