ICSC NEW YORK returned to the Jacob K. Javits Convention Center on December 10–11, bringing together nearly 8,000 retail real estate professionals for one of the industry’s most crucial dealmaking and idea-sharing events of the year. Against a backdrop of elevated construction costs, a cooling labor market, and continued uncertainty heading into 2026, the tone at this year’s conference was notably optimistic.

Over two days of panels, meetings, and market commentary, the following themes emerged that will help define retail strategy in 2026 and beyond:

1. Smaller, More Flexible Store Formats Are Winning: Retail leasing continues to favor smaller spaces, with the average lease size falling below 3,500 square feet for the first time in recorded history. Retailers are prioritizing efficiency, visibility, and adaptability over large footprints, particularly in food, beverage, and service categories.
2. Placemaking Has Become a Core Strategy, Not a Luxury: Retailers and landlords are increasingly focused on environments that extend dwell time and deliver experiences that can’t be replicated online. Entertainment, medical, wellness, and experiential uses are playing a growing role in driving sustained traffic and sales.
3. Retailers Brace for Slower Growth: Retailer sentiment has softened, with many expecting slower sales growth in 2026 amid inflation pressures and trade uncertainty, reinforcing the need for sharper differentiation, particularly for mid-tier brands navigating an increasingly polarized market.
4. AI Is Enhancing What Gets Built: With limited retail development underway, AI is increasingly used to evaluate market demand, identify where investment is most viable, and guide early-stage development decisions before design even begins.
5. Southern U.S. Markets Continue to Stand Out for Investment: Southern U.S. metros, including Texas, Miami, and Phoenix, remain top retail investment targets heading into 2026, driven by population growth, strong consumer demand, and favorable long-term fundamentals.
6. Design Efficiency and Speed Are Becoming Competitive Advantages: In a high-cost construction environment, faster design iteration and tighter coordination between teams are helping developers refine layouts, control costs, and move projects from concept to execution more efficiently.
7. Retailers Are Prioritizing Precision Over Scale: Retailers are increasingly favoring right-sized formats and data-backed expansion strategies that emphasize performance and efficiency over rapid footprint growth in supply-constrained markets.
8. Leasing Decisions Are Becoming More Consumer-Led: Leasing strategies are increasingly informed by real-time insights into consumer behavior, brand affinity, and spending patterns, which in turn shape tenant mix and site selection with greater precision.
9. Capital Remains Selective but Active: While transaction volume remains disciplined, capital continues to target assets and markets with durable foot traffic, strong fundamentals, and long-term relevance.
10. Technology Is Accelerating Decision-Making: The adoption of technology is enabling retail stakeholders to move faster, reduce friction, and respond more dynamically to shifting market conditions and evolving consumer expectations.