Following the 2025 ICSC Conference, we sat down with Alan Stern, Senior Vice President at Friedman Real Estate, to get his perspective on the current state of the retail market. Based on his conversations with national retailers, landlords, developers, and lenders, one thing is clear: retail remains strong and adaptable in the face of evolving challenges.
Retail Expansion Continues Despite Headwinds
Retailers, especially in the home improvement sector, remain committed to expansion. Even with tariff-related pressures, most are not planning price increases, instead focusing on long-term growth strategies.
In contrast, women’s specialty retailers, outside the off-price category, are experiencing margin compression due to both softer sales and higher import costs. Many are now prioritizing occupancy cost reductions and operational efficiencies.
Construction Costs Stabilize, but Caution Remains
While construction pricing has leveled off, concerns persist around the viability of new development. Uncertain timelines and return metrics are leading many retailers and developers to favor existing space or redevelopment opportunities.
Investment Sales: Quality Drives Activity
Transaction volume has slowed in recent months, but high-quality assets continue to attract interest. Properties with strong credit tenants and prime locations remain in demand, reinforcing the market’s focus on long-term value.
AI Integration Accelerates Across the Industry
Artificial Intelligence was a recurring theme throughout the conference. AI tools are increasingly being used to streamline leasing, underwriting, site selection, and property operations, enhancing both efficiency and decision-making across the board.
Vacancy Remains Low, Lease Rates Rising
Nationwide retail vacancy is under 5%, with strong demand putting upward pressure on lease rates. Retailers are moving quickly to secure space, especially in high-traffic corridors and dense trade areas.
Expert Insight
During our discussion, Alan summarized the current sentiment:
“This conference proved a point that retail is not dead. The conversations at ICSC 2025 reaffirmed that retail is not only stable but gaining strength in key sectors.”
—Alan Stern, Senior Vice President, Friedman Real Estate
Conclusion
The key message from ICSC 2025: Retail is not dead. Well-located, well-positioned properties are thriving, and the market continues to reward adaptability and quality. At Friedman Real Estate, we remain committed to helping clients navigate this evolving landscape with insight and precision.
