T
he US retail real estate sector is expected to remain strong in 2025, despite potential economic headwinds. A national investment forecast from Marcus & Millichap notes that core retail sales rose 3.4% year over year in 2024, outpacing inflation and driving foot traffic across various property types.
Retailers saw a significant increase in foot traffic last year, with gyms and fitness centers experiencing the largest gains at 5.7%. This trend reflects Gen Z's growing emphasis on health and wellness. However, researchers caution that rising inflation could curb retail spending, particularly if household budgets are impacted by proposed tariffs.
Marcus & Millichap predicts an uptick in bankruptcy filings among retailers this year, with store closures projected to double. Nevertheless, the company expects competitors to quickly fill those spaces due to sufficient demand. Several Sun Belt cities are expected to have strong revenue growth for retail property owners, led by Orlando, Fla., which boasts the top household formation rate and revenue growth.
Orlando's popularity among international tourists and local population gains have driven up demand for supermarkets and essential retailers. The city's theme parks also contribute to its appeal. Other top-performing markets include Raleigh, N.C.; Tampa-St. Petersburg, Fla.; Miami-Dade County, Fla.; and Dallas-Fort Worth, Texas.
