CRE industry watchers are increasingly observing signs of renewed life for retail—but pricing challenges may loom large in the short term as the sector recalibrates.

"Due to e-commerce competition and changing consumer preferences, retail-property assets have faced increasing stress long before the COVID-19 pandemic arrived," Moody's Analytics' Ermengarde Jabir writes in an analysis originally published in Scotsman Guide. "But while many thought that the onset of pandemic-related restrictions would mark a true beginning of the end for brick-and-mortar retail, this simply has not been the case."

At the dawn of the pandemic, e-commerce as a share of US retail sales shot up from 11.4% to 15.7%, a historic high between the first two quarters of 2020. But since then, the metric has declined, hitting 12.9% in the fourth quarter of last year.  In other words, "in an apparent reversion to their original growth path, e-commerce sales (while still growing) indicate a continued consumer desire to make in-person purchases," according to Jabir.