Changing consumer habits and shifting tenant priorities are redefining how retail space is planned, leased, and experienced. To explore these trends, I spoke with my colleague Nicole Larson, Manager, National Retail Research at Colliers. In my role leading Agency Leasing, I partner with leaders across office, industrial, healthcare, and retail to anticipate change and help our clients capture opportunity. Nicole brings a valuable perspective on how these trends are shaping retail, and this Q&A highlights some of the opportunities ahead.

Matt: From your perspective, what are the biggest shifts happening in retail leasing today?

Nicole: One of the most significant shifts is the bifurcation of demand. Well-located lifestyle centers, grocery-anchored strips, and mixed-use projects are thriving, while legacy formats and under-performing categories are contracting.

Food and beverage concepts, especially quick-service restaurants (QSRs), are driving much of today’s leasing demand. Restaurants, bars, and coffee shops now account for nearly one-fifth of all new activity, fueled by record dining spend. QSRs alone opened more than 2,700 net new stores in 2024, led by brands like Starbucks, Chick-fil-A, and Raising Cane’s. This resilience and expansion underscore why landlords are competing aggressively to secure these tenants.

Matt: What are some of the unique challenges or opportunities in retail leasing compared to other asset classes?

Nicole: Retail is uniquely shaped by consumer behavior and brand perception. Unlike office or industrial, it’s not just about square footage but the experience and visibility a space provides. A flagship tenant can elevate an entire property, creating a halo effect for co-tenants and enabling landlords to command higher rents.

The challenge is balancing this exclusivity with rising costs. With new development muted, landlords are focused on repositioning existing assets and structuring more complex deals, often tied to performance or bundled across a portfolio. Curation, clustering, and experiential value are essential for success.

Matt: How are tenant expectations evolving, and how should landlords adapt?

Nicole: Tenants are asking for more flexibility and partnership. Many want shorter lease terms, performance-based rents, or tenant improvement allowances. At the same time, they expect landlords to deliver more than space — they want curated environments with complementary neighbors, strong foot traffic, and digital integrations.

Landlords can meet these expectations by adopting an “access as currency” mindset. The value of prime space is no longer just in square footage but in visibility, traffic, and community. Those who combine flexibility with curated ecosystems will remain the partners of choice for leading retailers.

Matt: Looking ahead, where do you see the greatest opportunities for innovation and growth?

Nicole: The biggest opportunities lie in reimagining existing assets. With limited new retail construction expected in the coming years, landlords are transforming underutilized space into mixed-use, experiential, and service-oriented destinations. Growth areas include health and wellness, entertainment, and digitally integrated retail that extend dwell time and keep traffic consistent.

On the leasing side, innovation will come from flexible deal structures, short-term activations, and portfolio-wide clustering strategies that allow tenants to test and scale efficiently. Data and analytics will also be critical, helping landlords match the right concepts to the right spaces. Those who embrace flexibility, repositioning, and data-driven decision-making will capture the next wave of growth.

In Closing

Nicole’s insights reinforce what I see across industries: leasing is no longer defined by the physical space alone. The true value lies in access, visibility, and community. Whether in retail, office, or industrial, success belongs to landlords and tenants who embrace flexibility, leverage data, and prioritize curated, experience-driven strategies. Retail may be leading this evolution, but the lessons extend across the entire spectrum of commercial real estate.