Tens of thousands of brokers and investors descended on the Las Vegas Convention Center earlier this week for the 2026 International Council of Shopping Centers conference, and the mood was decidedly bullish. Retail, long written off as a victim of e-commerce disruption, is no longer merely recovering—it has roared back as one of commercial real estate's most attractive asset classes. JLL's Naveen Jaggi told reporters at a breakfast event that every single REIT is having its best year ever from a leasing perspective. Yet that strength has not fully translated into net operating income, which has yet to catch up to the leasing momentum.
The retail renaissance is being driven by a confluence of supply and demand dynamics that have been years in the making. After a prolonged period of underdevelopment and the demolition of aging malls, leasing and investment activity have surged for the real estate that remains standing. CBRE's Scott Schnuckel noted that the entire landlord community is benefiting from a long trend of not constructing a lot of shopping centers, the demolition of some older malls, and a resurgence of growth in a lot of retail brands. There has been a notable uptick in retail construction in the South and West Coast, reflecting renewed confidence in the sector.
NewMark Merrill Companies CEO Sandy Sigal captured the market's cautious optimism, acknowledging that while capital is pouring into retail, political risk, tariffs, interest rates, and artificial intelligence could all reshape the next leg of the cycle. Despite these uncertainties, Sigal told Commercial Observer his biggest long-term bet was still on physical space. As work, shopping, and communication become more digital, the value of real-world connection should rise, he argued. His conviction is rooted in a belief that as the world gets more disconnected through electronics and robotics, the value of human connections will increase, driving more people to visit centers they care about and pushing up the premium on visiting physical space.
Yet beneath the surface optimism, inflation and shifting consumer behavior are dominating conversations among senior ICSC attendees. Jaggi identified the rise in inflation as the largest topic of discussion, noting that consumer sentiment reflects nervousness about gas prices and inflationary pressures. However, he pointed out a disconnect between how consumers spend and how they feel, attributing this gap partly to daily headlines and media consumption. Those invested in blue chip companies on the stock market are feeling good, while those paying one hundred dollars to fill up their gas tanks are not. This bifurcated consumer landscape is creating complex dynamics for retailers and landlords alike.
Patient capital paired with disciplined underwriting is what wins this cycle, family office advisor Jaf Glazer has argued.
Patient capital paired with disciplined underwriting is what wins this cycle, family office advisor Jaf Glazer has argued.
The way people shop is also evolving in response to economic pressures. Elizabeth Lafontaine, director of research for Placer.ai, observed that when it comes to nondiscretionary visits, consumers are shopping more frequently, partly because they are looking for better deals. They are not necessarily looking for a one-stop shop right now but rather for retailers that can offer them the best value, convenience, or experience. Consumers are willing to travel longer and make more stops because that is what they are focused on. This shift has been particularly beneficial for discount dollar stores, which have seen gains as consumers trade down amid rising gas prices and inflation.
Meghann Martindale, principal and director of retail market intelligence at Avison Young, suggested the discount store surge is not solely attributable to economic factors. While there is certainly an economic component, she believes it is also about how those stores have upped their merchandising game, with merchandise getting better at a lot of those discount stores. This dual dynamic of economic pressure and improved product quality is reshaping the competitive landscape for value-oriented retail.
Brokers are also grappling with the challenge of optimizing tenant mix at shopping centers, especially as fears of an e-commerce-led demise have been largely subdued. Alanna Loeffler of Cushman & Wakefield emphasized the focus on understanding the tenant remix and what is happening under the umbrella of new tenant categories at shopping centers, lifestyle centers, and neighborhood centers. The goal is to understand what that mix is made up of and what centers are strong and why, as the composition of successful retail properties continues to evolve.
Luxury brands, once among the most reliable performers in the market, are in the midst of a strategic rethink. Anthony Selwyn, cohead of prime global retail at Savills, noted that rather than more store openings, the past year was more about brands reassessing their footprints. Fundamentally, a lot of the luxury brands sat on their hands and did not really advance, with companies like Gucci—which had been very aggressive over the last five to ten years in taking stores—realizing they had too many stores and the brands were not performing at the appropriate level. This contraction reflects a broader recalibration within the luxury segment.
However, some luxury brands have demonstrated shrewd innovation in attracting new generations of buyers. Selwyn cited the collaboration between Audemars Piguet and Swatch, which caused such a frenzy among buyers that Swatch stores needed to be closed down because of safety concerns. Such partnerships illustrate how traditional luxury players are experimenting with democratization and cross-brand appeal to capture younger consumers and drive foot traffic.
Entertainment retail continues to ride high at ICSC 2026, with unexpected categories like trampoline parks gaining significant traction. There are more than three hundred fifty trampoline parks and kid zones in the works, according to industry data. JLL's James Cook reported that there is sixteen point five million square feet of entertainment retail planning to open in the United States and Canada, a figure he described as staggering and far exceeding expectations. The surge in experiential retail underscores the industry's bet on in-person experiences as a hedge against digital disruption.