Retail Isn’t Dying, Most People Are Just Trapped in a F$%king Echo Chamber

There’s this myth that retail real estate is on life support. You’ve heard it:

That narrative is loud. It’s in headlines, on podcasts, in think pieces written by people whose nearest exposure to real estate is buying or renting a house.

And it’s almost entirely wrong.

So…what’s actually happening?

Retail real estate for the most part is thriving.

As of Q4 2024, the national retail vacancy rate was 5.4%, a 20-year low.
📉 Cushman & Wakefield Report

Good real estate in good trade areas? It leases fast, often with multiple tenants chasing the same space or site.

What doesn’t lease? Functionally obsolete product. Think:

• Awkward ingress/egress

• Poor visibility

• Not enough parking

• Non-optimal tenant mix (think about that small strip center in your town with all food and no parking)

• Elbow spaces…

• Extensive deferred maintenance

• Or properties left behind by shifting populations

Let’s talk about the bankruptcies

Most retail bankruptcies aren’t about real estate…they’re the fallout of financial engineering gone sideways. Not every closure fits this mold but dig into the details and you’ll find more often than not; it traces back to private equity stepping in and extracting all the valuable assets from the company.

💥 Bed Bath & Beyond? Buried under debt, stripped of assets, and stuck with an outdated playbook.

📰 The News that Broke Live, Laugh, Love Moms Everywhere

💥 Sears? Eddie Lampert turned it into a Harvard Business School case study in value destruction.

📰 Deep Dive into Eddie’s History with Sears

And the “mallpocalypse”? Mostly overblown

Yes, a lot of malls failed, mostly thrown up during the 1980s land rush, when tax incentives and cheap dirt led developers to build like demand was infinite. It wasn’t, the US ended up with way more Spencer’s gifts than the country could support.

But here is what the usual “Dead Mall” trope misses:

• 🏬 Class A malls in dense, affluent markets (Simon Property Group hit 96.5% occupancy in Q4 2024 — an 8-year high)
  📰 Simon Keeps Proving that Well Positioned Malls are Far from Failing

• 🛍️ New store openings — over 7,700 in 2024 alone, even while names like Rite Aid and 99 Cents Only grabbed headlines
  📰 2024 Retail: Closures Made Headlines, Openings Made Moves

• 🏗️ Repositioning plays — converting failing malls into mixed use developments including housing, hospitality, or walkable open-air centers
  📰 Turning Malls into Neighborhoods, Every 90s-00s Kids Dream

And the people calling it dead?

They think NNN stands for a funny challenge that takes place in November 😉 and not, Triple Net lease…

Not tracking tenant demand. Not watching multiple LOIs hit a well-located endcap or outparcel.

Retail in 2025 doesn’t look like retail in 2005.

And that’s a good thing.

If you’re in the game, you already know.

For everyone else,

That’s all for now! I appreciate everyone who’s been part of this community across all the different social media platforms. My goal with this newsletter is to dive deeper into various aspects of the CRE industry, with a focus on the brokerage side. I aim to bring the same levity and reality to these insights as I’ve done with the memes.

If you have any input, feedback, or questions, feel free to reach out. The DMs, emails, and real-life connections have been some of the coolest experiences along this journey.

-CapRateCraig

What we’re reading & listening to this week:

A great podcast to follow if you’re interested in the retail landscape:

This is seriously one of my most consistent reads in the newsletter world. I’m not sure anyone has been able to discuss the CRE industry as whole in as engaging and entertaining way as the team over at Ten31.

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