The Crexi Podcast welcomed Matthews™ Senior Vice President Jeff Enck to reflect on his 25+ years of experience in retail investment sales, and to further explore the sustained strength and evolving perception of unanchored retail strip centers in today’s investment landscape.
Amid economic shifts and the ongoing evolution of retail, Enck highlights how mom-and-pop tenants, once overlooked, have emerged as cornerstones of reliable cash flow for investors. “They have their heart and souls into these businesses. They’ve survived COVID [and] they’re more solid than people think,” said Enck. With national retail occupancy hovering around 95-96%, he underscores a broader market realization: strip centers, especially those offering essential services, are here to stay.
In the episode, Enck shares key insights into the evolving retail strip center market, emphasizing its post-COVID resilience. He highlights growing interest in the top 10-15% of the 68,000 U.S. strip centers, noting, “Those are the ones that the institutions are after,” due to their strong fundamentals. Enck also underscores the fragmented nature of private ownership, “85, maybe even up to 90 percent of the properties are still owned by private owners,” which complicated large-scale acquisitions. He points to surprising rent growth, “The big surprise for me….has really been the rent growth,” and the rise of service orientated tenants like medical, dental, and wellness providers.
From dentists to dry cleaners, and from cigar lounges to wellness clinics, Enck paints a vivid picture of the retail ecosystems thriving at the neighborhood level. He also touches on the rise of franchisees, the nuanced risks of poorly located properties, and the potential for creative redevelopment in a tight construction market.
When asked what he thinks the biggest threat to strip centers in the coming decade is, Enck says, “I think they’ve got staying power and I don’t think there’s any thing that’s going to really harm strip centers.”
Listen to the full podcast to learn more from Jeff Enck about current and historical trends in the market.
