Retail CRE Positioned to Withstand Potential Headwinds

Retail Fundamentals Hold Firm ​Amid Trade and Economic Uncertainty​

Retail Fundamentals Softened Slightly in Early 2025​

• Vacancy rate ticked up 10 basis points to 4.5%​

• Retail absorption slipped negative by 4.7 million square feet in the first quarter of 2025​

• Some expansion plans remain, but momentum faces new headwinds​

Tariffs and Trade Uncertainty Create New Retail Challenges​

• Retailers sourcing heavily from China face the greatest tariff impacts​

• Tenant mix will be critical to mitigating tariff-related risks​

Long-Term Retail Outlook Remains Positive​

• Limited retail construction will curb new supply pressure​

• Millennials entering peak earning and spending years support demand​

• Retail cap rates in the upper-6% range offer potential for positive leverage​

* Through 1Q​
Sources: Marcus & Millichap Research Services, CoStar Group, Inc.​​

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