{"id":1004812058,"date":"2026-09-16T09:42:20","date_gmt":"2026-09-16T17:42:20","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004812058"},"modified":"2026-09-16T10:31:01","modified_gmt":"2026-09-16T18:31:01","slug":"when-the-real-estate-is-better-than-the-rent-roll","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/when-the-real-estate-is-better-than-the-rent-roll\/","title":{"rendered":"When the Real Estate’s Better Than the Rent Roll"},"content":{"rendered":"
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John Darrow and Ryan Byrne<\/figcaption><\/figure><\/div>\n\n\n

For most of the last decade, the investment case for retail real estate was largely defensive: limited new supply, resilient tenants and the realization that e-commerce was not going to eliminate the need for physical stores. Today, the story has become considerably more interesting.<\/p>\n\n\n\n

The next leg of the retail story may be less about occupancy and more about repricing existing space.<\/p>\n\n\n\n

Consider one data point from Kite Realty’s second-quarter results. Comparable leases where tenants held renewal options increased 6.6 percent. Renewals without options increased 17.7 percent. Same landlord. Same quarter. Same market. The primary difference was whether the tenant had the contractual right to stay without renegotiating the lease.<\/p>\n\n\n\n

That distinction matters because the backdrop for open-air retail has changed dramatically from when many of today’s expiring leases were originally signed.<\/p>\n\n\n\n

National retail vacancy remained near historic lows at 4.4 percent in the second quarter, according to CoStar. At the same time, new supply remains historically constrained. Just 5.7 million square feet of retail space was completed during the quarter, a new low as elevated construction and financing costs continue to constrain speculative development.<\/p>\n\n\n\n

In other words, there is very little available space and very little new space coming. For owners of well-located retail, that is a powerful combination.<\/p>\n\n\n\n

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CPE Capital Markets Newsletter<\/h2>\n\n\n\n

Executive Editor Therese Fitzgerald delivers the capital markets intel that moves the needle.<\/p>\n<\/div><\/div>\n<\/div><\/div>\n\n\n\n

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