B
reaking Ground: Commercial Real Estate's Top Stories of the Month
As we kick off 2025, the commercial real estate landscape is abuzz with activity. From stabilizing rents to record-breaking construction projects, here are the top news stories shaping the industry.
Rent Growth Hits a Plateau
After a tumultuous few years, retail rent growth has finally stabilized. According to Buxton's data, annual rent increases slowed to 3.4% in 2024, down from a peak of 5% in 2022. This welcome trend suggests that the market is adjusting to new realities.
Countertrends: A 70-Year-Old Retail Prodigy
Levin Management Company, a stalwart in the retail real estate scene for seven decades, has just set a record-breaking construction pace in 2024. The New Jersey-based firm invested $78 million in redevelopment projects across its 16-million-square-foot portfolio.
Labor Shortage Looms Large
A new forecast from Associated Builders and Contractors warns that the industry will need to bring in approximately 439,000 net new workers this year to meet construction demand. By 2026, that number will balloon to 499,000.
Department Stores Eye Expansion
A recent survey by NuOrder by Lightspeed reveals that six out of ten high-level retail directors plan to open new storefronts within the next 12 months. Forty percent also intend to expand their online marketplace operations.
Service-Based Brands Take Center Stage
CoStar's January summary highlights a significant shift in leasing activity, with foodservice tenants accounting for over 20% of leases and fitness brands snapping up 12%. Health care and education tenants rounded out the top three.
Big Box Retailers Make Waves
Kohl's is closing 27 underperforming stores by April 2025, while also shuttering its e-commerce fulfillment center in San Bernardino, California. Meanwhile, Barnes & Noble plans to open approximately 60 new stores across the United States this year.
Mall Traffic on the Rise
According to Placer.ai's Mall Index for December, overall visits to indoor malls and open-air shopping centers exceeded 2023 levels with year-over-year increases of 1.5% and 1.7%, respectively. Outlet malls, however, saw a slight decline in foot traffic.
Pacific Retail Makes Big Bets
The California-based real estate firm spent $400 million on various projects last year, including redeveloping The Shops at South Town in Sandy, Utah, into a National Hockey League practice facility.
Big Lots Closes Sale to Gordon Brothers
The closeout retailer has successfully closed its sale agreement with Gordon Brothers Retail Partners, paving the way for Variety Wholesalers to acquire between 200 and 400 Big Lots stores and up to two distribution centers.
Party City's Lease Auction Looms
A&G Real Estate Partners will auction 695 Party City store leases in early February as the retailer begins its wind-down operations following bankruptcy.
