The DLC has never been more bullish on the fundamentals we see at the property level. Retailers are waiting in line for any vacant space. They see a clear migration of consumers and establishments toward the suburbs, and open-air retail is perfectly positioned to flourish in this environment.
The numbers do not lie. Open-air retail is thriving. Customers are looking to stay closer to home to shop. Lifestyles have changed and people are looking for greater convenience and options in a neighborhood shopping center.
This attracts a greater mix of retailers and services to a center. Gyms, wellness, eatertainment, medical services. It’s about becoming a destination which is more experiential.
Keep in mind what the DLC call the “3% handcuffs.” In 2021, home sales in U.S. hit a 15-year high with people securing 30-year mortgages at historic lows of 3% or less. Rates are now 3 to 4 points higher. Most of these homebuyers will not be going anywhere anytime soon. This is a long-term fundamental shift that positions open-air retail as a driving force in neighborhoods for decades to come.