The retail sector has started the year on a strong footing after sustaining positive momentum through 2024, with vacancy rates remaining near record-low levels while rents continue to rise, according to the Marcus & Millichap 2025 Retail National Investment Forecast. Consumer resilience and improving foot traffic across many retail types have fostered demand across a diverse tenant base, and the outlook for the coming year is encouraging as the retail construction pipeline remains modest and several retailers have announced expansion plans.
Some near-term headwinds are likely to impact the sector, including increasing inflation, a shift in consumer behavior, and the potential impact of tariffs. The report noted a spike in store closures will be evident this year, but these spaces will attract backfilling from companies opening stores and expanding their footprints.
Marcus & Millichap said capital should be readily available this year for retail borrowers, with CMBS representing the primary avenue for interest-only loans. Borrowers seeking non-recourse loans for grocery-anchored centers and unanchored strip centers may look to life insurance companies, said the report.
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