- 140 MSF of retail space will hit the market in 2025 due to store closures exceeding store openings in 2024.
- Retailers closed 9.9K locations in the past year, led by discount stores, drugstores, and apparel brands.
- Big-box closures (20 KSF to 50 KSF) include Big Lots, 99 Cents Only, and American Freight, while large anchor closures (over 50 KSF) include Macy’s, Stop & Shop, and Target.
- Retail leasing is shifting toward experience-based tenants, with food & beverage (21%), fitness (12%), and healthcare (6%) leading new leases.
According to JLL’s retail market outlook, retailers announced over 9.9K store closures in the past year, far exceeding the 7.7K new openings, creating nearly 140 MSF of available retail space in 2025, according to Globe St.
Closures Outpace Openings
Retail real estate faces a new wave of vacancies, as retailers closed 9.9K locations in the past year, far exceeding the 7.7K new store openings. This imbalance will result in nearly 140 MSF of available retail space in 2025, according to JLL’s retail outlook.
The hardest-hit categories include:
- Discount and dollar stores: Family Dollar (DLTR), Big Lots (BIGGQ)
- Drugstores: Walgreens (WBA), Rite Aid (RADCQ)
- Apparel retailers: rue21, Foot Locker (FL)
“We’re seeing a clear acceleration of closure announcements over the last several months, many stemming from bankruptcies where retailers plan to liquidate their entire portfolio,” the report stated.
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What Stores Closed?
Closures are impacting various store sizes, including:
- Big-box spaces (20–50 KSF): 1.53K closures, including Big Lots, 99 Cents Only, and Dirt Cheap.
- Junior anchors (10–20 KSF): 2.7K closures, including Party City (RIP), Walgreens, and Planet Fitness (PLNT).
- Large anchors (>50 KSF): 200 closures, including Macy’s (M), Stop & Shop, and Target (TGT).
- Smaller stores (<10 KSF): 4K+ closures, including 7-Eleven (SVNDY), Advance Auto Parts (AAP), and Lumber Liquidators.
Experience-Driven
As traditional retail spaces close, service-based tenants are filling the gaps. In 2024, experience-driven retail dominated leasing activity, with:
- Food & beverage (21%): QSRs and fast-casual chains like McDonald’s (MCD), Chipotle (CMG), and Potbelly (PBPB).
- Fitness (12%): Boutique gyms like Alloy Personal Training, Club Pilates, and Planet Fitness.
- Healthcare (6%): Urgent care centers, dentists, and opticians expanding their retail presence.
Retailers prioritizing experiences over traditional goods are expected to drive leasing in 2025, as landlords adapt to shifting consumer preferences.
Looking Ahead
With a surge in vacant retail space, landlords must reposition properties to attract tenants focused on experiences, services, and essential goods.
While traditional retailers struggle, restaurants, fitness centers, and healthcare providers are stepping in to reshape the retail landscape.
