Retail rents have been facing a reality check as brands stepped back and took a breather when the stock market seesawed earlier this year. Nevertheless, retailers continue to eye the best locations and are swooping in when square feet and economics align.
Many stores expanded their footprints and locations. Now, Joan Siegel of Siegel Consultants believes some tenants want to digest what they have. “All expanding has not stopped,” Siegel says. “But the wild frenzy that went on for the last five years has slowed.”
In general, while wellness, food and tech tenants are expanding, traditional retail is consolidating with a focus on smaller stores, according to John Brod, a partner with ABS Partners.
“At Penn Station, Vornado Realty Trust is upgrading its side of an underground concourse with Magnolia Bakery and Shake Shack. Upstairs, the outdoor base of its One Penn Plaza is getting more upscale food tenants similar to its Pennsy food hall.”