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Category: Shopping Centers Tags: Shopping centers, State of the Market, The Matthews Podcast

On this episode of the Matthews™ podcast, specialized agents dissect the shopping center sector and the shifts occurring in the space with Matthews™ Market Leader, Matthew Wallace. We are joined by CRE experts Devon Dykstra the Director of Western US Shopping Centers, Tripp Brown an Associate specializing in Shopping Centers, and Grayson Duyck a Matthews™ leasing specialist in the Dallas-Fort Worth market.



Shopping centers experienced mixed results from the challenges presented throughout 2020. Depending on their anchor and location, shopping centers either struggled or flourished. Quality, well-positioned assets with essential retailers witnessed heightened demand, while shopping centers with predominantly discretionary stores saw depleted revenue and decreased demand from investors and consumers. New construction shopping centers welcome tenants based on their essential nature, income, and pricing transparency.


As a result, shopping center owners in 2021 are approaching retail leasing cautiously and selectively due to the rent instability that occurred in 2020. Many landlords suffered as collection issues and vacancies rose because of the pandemic. Although landlords would rather fill space than have space sit vacant on the market, there is a pricing disconnect between landlords and tenants. This gap keeps long-term retail leasing stagnant as more tenants opt to sign short-term leases, and landlords take on the risk, betting on the future of retail. A common tenant trend is a flight to quality centers. Moving forward, tenants are looking for unique outdoor space, safety, and tech infrastructure in both urban and suburban developments.


Now that retailers understand their business model after re-examining shopping behavior through online habits, a new generation of shopping centers is anticipated to emerge. One highly sought-after asset class is multi-tenant net lease retail pad sites because it offers attractive financing options, drive-thru capabilities, and healthy foot traffic. These types of centers also often include essential retailers, which quickly grew in demand following a year that involved temporary and permanent store closures. Retail centers will become more balanced and diverse, with the addition of drugstores, restaurants, discount retailers, and even healthcare facilities.


Podcast Breakdown

1:04 – How has the shopping center market fared this year?

1:42 – What type of shopping center flourished and which are ones are having more trouble?

2:24 – Who are the big players in the space?

2:58 – Have you seen institutions dipping their toes back into retail?

3:24 – What does the financing market look like for these types of assets?

4:11 – What does the current leasing environment look like for shopping centers?

4:40 – Have landlords been proactive? What leasing strategies and trends have you seen landlords implement to attract tenants?

5:50 – What sector specifically has the strongest leasing momentum and which ones have lagged?

6:58 – What are the rent levels like compared to pre-COVID-19? Has the market caught back up?

8:48 – What does the future of shopping centers look like?

10:36 – Have you seen any creative ways to make shopping centers more versatile from an investment perspective?

12:00 – What’s the hottest trend in shopping center development?

13:37 – What other tenants are developers targeting for ground-up development?

14:50 – Parting words of advice for investors looking to get involved in the Southeast, West, and South

For more information on shopping center investment and leasing, please reach out to a Matthews™ specialized agent.

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