2025 Retail Trends: An Interview with JLL’s Brett Suszek

Brett Suszek is Senior Managing Director with JLL Value and Risk Advisory.

MBA NewsLink: What are the major trends you think we will see play out in the retail space in 2025?

Brett Suszek: A generally positive economic sentiment should carry into the new year, continuing trends of strong sales results and healthy retail operations. Retailers will continue to get creative with experiential components or concepts such as Dick’s House of Sport or Nike’s Rise concept. The continued urban revival should strengthen urban retail real estate with the greatest positive impact on prime locations, such as Wilshire Boulevard in Beverly Hills or Madison Avenue in New York City, and luxury retailers.  

MBA NewsLink: What’s your macro overview of the sector for 2025, specifically as it relates to subsectors of the industry?

Brett Suszek: For 2025, we see shopping centers as strong and attractive investment options, including those power and lifestyle centers that were historically considered riskier. Dollar store resiliency, led by the Dollar General expansion, seems unshakable and will continue through the year ahead. Youth sports will continue to grow, with many developers looking to youth sports as an anchor option for new developments, given families are spending more and more time in this space.  For areas of the sector that may face headwinds, we anticipate drug stores continuing to face challenges, and perhaps some closing or reducing space. Drug stores will have to reimagine their format and layout if they want to remain viable in the era of telehealth.

MBA NewsLink: How is the investment profile changing in the retail sector?

Brett Suszek: Grocery-anchored shopping centers are still extremely desirable. However, with continued strong demand and stubbornly low supply, other traditionally less-in-favor shopping centers are seeing increases in demand. This has caused the historic spread in investment rates between grocery-anchored centers and, for example, lifestyle centers, to narrow. There’s still a spread, it’s just not as significant as it’s once been. Value-add opportunities are seeing increased interest from groups that traditionally only invest in stabilized centers, again due to lack of availability. 

MBA NewsLink: Are shopping malls still out of favor or has the sentiment/values shifted?

Brett Suszek: Over the last five years, the U.S. mall transaction market has remained relatively slow paced with relatively little to no prime or A+ mall transactions occurring, making the landscape difficult to estimate. However, there are plenty of transactions down the scale of mall classification. A small handful of groups make up the entire buyer pool for mall transactions, which are commonly transacting in the double digits in terms of cap rates. While the shopping mall market is continuing to evolve, shopping malls are still lucrative as investments, provided cap rates are sufficiently padded. The repositioning of mall assets is a continued trend with more and more track record across the U.S. Seritage Growth Properties, which owns a portfolio of former Sears stores, has had success through a diverse range of reuse, repositioning and redevelopment of these former big box stores. We’re seeing a lot of grocery or non-traditional department store occupancy of dark anchor space at malls, such as Harris Teeters or Target. Mall owners are getting creative or they’re losing out on missed revenue opportunities.  

MBA NewsLink: What’s the biggest factor influencing values in the sector?

Brett Suszek: We’re seeing aggression in pricing given retail’s resilience. Retail continues to exhibit consistency even through COVID. Due to this, we are seeing an institutional exit from retail increasing the share of ownership to private firms. One strong factor influencing this is liquidity; between the retail and office sector, it is much more feasible to access liquidity from the retail sector for institutions looking to make moves. 

MBA NewsLink: What’s the buyer profile of retail at the moment?

Brett Suszek: Shopping mall buyers remain a very small handful of buyers, which is likely to remain the case. Buyers of shopping centers are more and more private investment firms or partnerships/individuals. For example, private investors make up over 80% of the buyer pool for unanchored shopping centers. The buyer pool for net lease assets remains diverse, with considerable participation from institutional buyers, but strong participation from high-net-worth individuals, partnerships, and private equity.

MBA NewsLink: I’ve heard there’s a renaissance in urban retail? Can you explain?

Brett Suszek: Urban retail is riding the coattails of the overall urban revival. Office found its bottom and is now on the rise. This has reaffirmed the multifamily sector in urban areas, which had always remained strong. So, it follows that the urban revival bolstered the retail real estate market, which had a large question mark when the office sector was seemingly in freefall. Many large firms’ return-to-office schemes have teeth, and smaller firms are following suit. Urban retail, particularly high street retail, is feeling the increase in demand. Luxury brands are particularly primed for an increase, and we’re seeing a rise in interest from international luxury brands looking to bolster their brands. Apparel is dominating this renaissance, but there is no shortage of demand from restaurants, fitness operators and experiential concepts. Helping buoy this trend is a strong increase in urban infrastructure spending through pedestrianization, transit improvements and sports entertainment.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)