Investment in the retail sector soared to $21.2 billion in the second half of 2024, marking a 36% increase from the first half of the year. This growth pushed total retail investment volume to $36.8 billion for the year, reflecting a 6% year-over-year increase, according to a recent retail market dynamics report.

Looking ahead, the momentum may continue, with industry sources projecting an even stronger performance for the sector in 2025.

The surge in retail investment was driven by favorable market conditions, including interest rate cuts, limited new supply, and historically low vacancy rates. Additionally, the availability of acquisition opportunities below replacement costs in major markets and high valuations for retail portfolios contributed to increased investor interest. Key investment areas included grocery-anchored and unanchored convenience centers, luxury retail, and urban shopping districts in both established and emerging locations.

Last year also saw the average retail deal size climb to a 12-year high of $20.2 million—an 8.3% rise from 2023.

High-profile deals included urban retail properties such as 717 Fifth Avenue and the LINQ Promenade lifestyle center, as well as major mall acquisitions like RiverTown Crossings Mall, Westfield Annapolis, and White Marsh Mall.

Retail investment is expected to maintain its strength in 2025 as investors seize opportunities to acquire properties at costs below their replacement value.

Source:  GlobeSt.