Retail

U.S. developers massively overbuilt malls and shopping centers over the ≈30 year period starting in the 1970’s. By 2010, The Great Financial Crisis and emergence of e-commerce were driving retail store closures across the country as investors raced for the doors, driving cap rates up into the double digits for previously (and subsequently) desirable assets, creating tremendous opportunities for grounded, analytical, and courageous investors.

American consumers defied predictions and continued shopping in person, as physical retail still accounts for approximately 84% of the $7.4 trillion U.S. retail market. Supply constraints stemming from the “retail apocalypse” of the 2010’s drove vacancy rates to 20-year lows by 2024. Asking rents are rising and capital is returning. The retail sector offers a case study in how investor overreaction to evolving circumstances can create excess volatility and generational investment opportunities.