Prominent Landlord Sandy Sigal On the Lasting Premium in Retail

Why It Matters

The influx of capital amid limited supply reshapes retail real‑estate economics, while technology and new tenant mixes could redefine profitability for landlords and investors.

Key Takeaways

• NewMark Merrill manages 110+ centers, $3B portfolio across three states
• Capital inflow and limited construction push retail rents higher
• Traffic at centers is 20% above pre‑COVID levels despite fragile consumers
• AI and robotics expected to reshape store operations and labor costs
• Discount retailer Five Below and pet‑care concepts seen as growth winners

Pulse Analysis

Retail real‑estate is experiencing a rare convergence of abundant capital and constrained supply. Investors are snapping up existing shopping centers, and the scarcity of new builds is compressing vacancy rates, which in turn lifts rents. Even as consumers remain price‑sensitive, foot traffic at NewMark Merrill’s assets is up 20% versus pre‑pandemic levels, suggesting that well‑located neighborhood centers still attract shoppers seeking convenience and community experiences.

Technology is rapidly infiltrating the brick‑and‑mortar landscape. Proptech vendors showcased AI tools that streamline inventory management, while robotics promises automated deliveries and in‑store assistance, potentially slashing labor and transportation expenses. Landlords like Sigal see these advances as a way to boost tenant margins and, ultimately, their own rent premiums. The shift also encourages a re‑evaluation of tenant mixes, favoring operators that can leverage tech to enhance efficiency and customer engagement.

Consumer behavior is evolving toward experiential and niche offerings. Discount chains such as Five Below thrive on value‑driven shoppers, while pet‑care services like K9 Resorts tap into the growing pet‑ownership trend. These categories generate repeat visits and longer dwell times, reinforcing the premium on physical space. For landlords, diversifying across formats and geographies—while monitoring political and economic headwinds—offers a hedge against volatility and positions them to capture the next wave of retail demand.