For decades, retail real estate followed a familiar formula: optimize visibility, maximize efficiency, and let product do the work. That formula has been rewritten. After a headline-heavy first half of 2025, a second-half rebound helped keep U.S. retail fundamentals tight, with vacancy ending the year at 4.3%.
The market has shown showed clear signs of movement, too: leasing activity climbed to its highest level in three years, median time on market fell to about seven months (with premium locations often leasing in under five), and in Q4 2025 existing tenants expanded by more than 12 million square feet. Investment activity is reflecting that same reset, with retail property sales up 31% year over year, a sign that buyers and sellers are finding pricing alignment again for well-positioned retail.
Retail is moving again. The question for owners and investors isn’t simply “Will it lease?” It’s: what kind of retail earns the customer’s choice, and therefore wins the tenant’s choice?
That’s where experiential retail and placemaking stop being buzzwords and start functioning as underwriting criteria. Physical retail is increasingly expected to deliver multiple, longer visits, and a feeling of “this belongs here.” Not every property can become a mixed-use megaproject. But every property is being judged on whether it feels like a place people choose to spend time, not a box they pass through.
A MARKET RESPONSE, NOT A NEW FORMAT
Experiential retail is not emerging as a discrete tenant category. It’s the market’s response to changing fundamentals. Convenience moved online, and that stripped stores of their transactional advantage. Now the trip itself needs to justify the lease.
That shift is visible in what’s behind leasing activity. The strongest demand generators are remarkably consistent: grocery, fitness, wellness, food and beverage, and service-oriented concepts. And many of the concepts expanding today aren’t single-revenue businesses. They combine retail with service, memberships, events, and product add-ons. In a higher-cost operating environment, that layered model matters because it turns “experience” into stability.
Food and beverage deserves special mention within that mix, particularly quick-service and fast-casual concepts. QSRs continue to be among the most consistent drivers of traffic, benefiting from convenience, price sensitivity, and daily relevance. In many markets, they’re also the tenants moving fastest, filling spaces that support frequent, habitual trips rather than destination dining alone. READ THE FULL ARTICLE>
PLACEMAKING SCALES ACROSS ASSET TYPES
Placemaking is often associated with large, mixed-use environments, but its principles apply just as meaningfully at smaller scales. The distinction is not between “big projects” and “small shops.” It’s between environments that integrate into daily patterns and those that remain purely transactional.
A practical definition for CRE professionals is simple: placemaking is the combination of tenant mix, shared-space investment, and ongoing activation that turns retail real estate into a destination. It is not aesthetics alone. It’s an operating plan: how the property performs across different times of day and whether it stays relevant over time.
At the large-project level, mixed-use development continues to demonstrate how retail succeeds when it functions as connective tissue. Retail complements residential, office, hospitality, and public space, reinforcing consistent activity throughout the day. In that model, retail is not “the draw” in isolation. It becomes part of a broader ecosystem of reasons to be there.
At the neighborhood and standalone level, placemaking is quieter and more surgical. It looks like better promenades, shade and seating, kid-friendly moments, and flexible storefronts that can evolve with demand. It can include rotating kiosks, temporary activations, or outdoor programming that helps a center behave less like a strip and more like a gathering spot. The point isn’t spectacle. It’s usability. A property that feels comfortable and cared for earns time. A property that feels neglected produces friction, and friction shows up as vacancy. READ THE FULL ARTICLE>
WHAT'S LEASING REFLECTS THE SHIFT
Across markets, leasing activity is clustering around concepts that monetize frequency and fit naturally into how people live.
New York offers a clear illustration of how placemaking works in a dense, high-cost environment. In Manhattan, neighborhood choice communicates as much as the space itself. Madison Avenue, the Meatpacking District, Williamsburg, and SoHo are not interchangeable. For experiential concepts, the surrounding district identity is part of the product. In a social-media-era retail environment, the address also functions like a marketing channel, which helps explain why experiential and concept-driven tenants cluster in “shareable” districts.
The tenant mix tells the same story. Wellness and fitness continue to scale up in meaningful footprints, with tenants like Chelsea Piers Fitness and Life Time each signing leases for around 50,000 square feet. Restaurants and nightlife remain central demand engines, supported by tourism volume that keeps the city’s concept ecosystem unusually dynamic. READ THE FULL ARTICLE>
