How Retail Found Relevance Again
August 4, 2026
For much of the past decade, retail was commercial real estate’s cautionary tale.
Following the Global Financial Crisis, investors viewed retail with deep skepticism. Many markets were overbuilt. E-commerce was growing rapidly. National chains were shrinking their footprints, and headlines predicting the “death of retail” became commonplace. Capital flowed elsewhere.
Today, the narrative looks very different.
Retail vacancy rates remain near multi-year lows, a remarkable turnaround for a sector that many investors viewed as structurally impaired a decade ago. According to JLL, U.S. retail vacancy held at just 4.4% entering 2026.
Well-located shopping centers are attracting intense investor interest, and retail rents are rising. According to CBRE, U.S. retail asking rents increased 2.4% year-over-year in the first quarter of 2026. Consumers continue to shop online, but they are also demonstrating something many observers underestimated: people still value physical places.
Retail Had a Supply Problem, Not a Demand Problem
For decades, retail development outpaced demand. The U.S. had far more retail space per capita than other countries. In 2018, the U.S. had 23.5 square feet of retail space per person – roughly six times the level of much of Western Europe.
Many centers became interchangeable collections of chain stores offering little reason for consumers to visit beyond convenience.
When e-commerce arrived, it exposed the weaknesses. Retailers and landlords were forced into a painful but necessary process of adaptation. Underperforming stores closed, obsolete centers struggled, and owners began rethinking what successful retail should look like.
Experiences Became the Product
As the industry began focusing less on transactions and more on experiences, it rebounded. The most successful retail destinations today aren’t about the products. They’re about entertainment, dining, wellness, community, and discovery.
Stores became showrooms. Landlords increasingly curated tenant mixes that created energy and repeat visitation. Fitness concepts, medical services, restaurants, experiential operators, and service-oriented businesses became critical components of successful retail environments.
Consumers can purchase almost anything online. What they cannot replicate digitally is the experience of spending time somewhere that feels engaging, social, and meaningful.
Office Faces a Similar Challenge
The office sector today finds itself in a position that feels familiar. Just as e-commerce forced retail to justify its existence, remote work has forced office to do the same.
Office buildings must offer something beyond basic functionality. Employees need a compelling reason to commute, companies need a compelling reason to lease space, and buildings need a compelling reason to stand out from competing alternatives.
The office sector is beginning the same journey retail started years ago.
Just as retail’s recovery came from improving the quality and purpose of existing space, office owners are increasingly investing in hospitality-level amenities, activated common areas, premium food and beverage offerings, wellness features, outdoor environments, and tenant experiences that create value beyond the traditional workplace.
That’s why properties that offer hospitality-level amenities, vibrant common areas, food and beverage options, and outdoor environments can command a premium.
Reinvention Takes Time
Many investors who declared retail permanently broken missed one of the strongest comeback stories in commercial real estate. Similarly, office is still early in its transformation. Some assets will struggle. Some will be repositioned. But if retail’s experience teaches us anything, it is that real estate sectors rarely disappear. They evolve.
Retail became more experiential, more curated, and ultimately more resilient. Office now has the opportunity to follow a similar path. Today’s challenges may ultimately be remembered as the catalyst that reshaped the future of the workplace.
Why It Matters
Market disruption often creates uncertainty, but it also creates opportunity for investors who can separate short-term market sentiment from long-term real estate fundamentals.
The investors who recognized retail’s transformation early were able to acquire well-located assets at attractive valuations before market confidence returned. Office is now entering a similar period of transition. While not every property will succeed, those that can be repositioned to meet changing tenant expectations may create compelling investment opportunities over the coming years.
For owners, lenders, and investors, the challenge is determining which assets are positioned to outperform and which face long-term structural headwinds. That requires more than market headlines, it requires disciplined underwriting, operational analysis, and a clear understanding of local market dynamics and tenant demand.
How Summer Street Advisors Can Help
At Summer Street Advisors, we help clients navigate periods of market change with independent, data-driven real estate analysis. Whether evaluating a single asset or an institutional portfolio, we provide the insight needed to make informed investment decisions with greater confidence.
Our services include:
- Acquisition and investment due diligence
- Portfolio and asset-level underwriting
- Lease abstracting and lease file reviews
- ARGUS modeling and cash flow analysis
- Market and financial analysis
- Appraisal management and appraisal review
- Loan portfolio review and credit risk assessment
- Asset management and portfolio optimization strategies
Markets evolve, and successful investors evolve with them. Our role is to provide objective analysis that helps clients identify risk, uncover opportunity, and make better real estate decisions throughout the investment lifecycle.
The retail sector’s resurgence reminds us that today’s challenges often become tomorrow’s opportunities. The key is recognizing the difference between assets that are simply facing cyclical pressure and those that are fundamentally positioned for long-term success.
About Jack Mullen of Summer Street Advisors:
As Founder & Managing Director of Summer Street Advisors, Jack Mullen leverages decades of experience in valuation, underwriting, and risk management to lead multi-million and multi-billion dollar CRE transactions.
Previously with GE Capital and large institutional banks, he has shaped investment strategies for some of the industry’s largest deals. A recognized leader, his insights are featured in GlobeSt.com and CREFC Finance World, and he is a sought-after speaker at industry conferences and top universities.
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