Tariffs, taxes, technology and recession-proofing the retail space.

Those are the top concerns and objectives of many of the 25,000 or so developers, property owners, retailers, brands, tech suppliers and other service providers attending ICSC Las Vegas, which started Saturday and runs through Tuesday at the city’s convention center.

It’s a huge forum for lease negotiations, discovering projects in the works or on the drawing boards, and learning how to navigate today’s economic uncertainties while planning for the future. The event has drawn 800 exhibitors covering 610,000 net square feet, including more than 130 new exhibitors and 113 retailer exhibitors.

Despite all the economic turmoil in the world, the shopping center industry has been in good shape. Occupancy rates are high, shopper traffic and spending have been holding up, and real estate firms are busy redeveloping properties with housing, fitness concepts, entertainment formats and restaurants to lift underperforming assets or fill available space due to store closures. They’re investing in upgrades and densifying their properties.

While space is generally tight, bankruptcies or liquidations by Bed, Bath & Beyond; Forever 21; Party City and JoAnn Fabrics, and store closings by Macy’s, Kohl’s, Saks Global and other retailers, provide opportunities for re-tenanting with new and healthier formats. Among the retailers vigorously taking over abandoned sites are Burlington Stores, Primark, TJMaxx, Home Goods, Academy Sports & Outdoors, Dave & Buster’s, Life Time health clubs; Costco, Nordstrom Rack, Natural Grocers, Boot Barn and Dick’s House of Sports.

“The industry as a whole is in a strong place right now,” said Stephanie Cegielski, ICSC‘s vice president of research and public relations. “Occupancy rates are incredibly high, so there’s actually not a lot of space available, which is a great problem for landlords, and not a great problem for retailers who want space. We’ve seen some turbulent economic times with inflation and the pandemic over the last five years, and yet consumers have continued to spend.”

Consumers may be resilient but some retailers and economists are predicting a second-half slowdown, and are raising red flags over tariffs, trade wars, rising prices on goods and stores’ ability to adequately stock their shelves for the next holiday season.

There’s also concerns that some of the provisions in the Tax Cuts and Jobs Act of 2017 could be changed significantly or not renewed. The TCJA was a landmark piece of tax legislation that lowered corporate and individual tax rates. Many of its provisions are set to expire on Dec. 31. “Tariffs and tax policy are the key indicators. They drive Wall Street and the capital markets. So that’s really where the focus will be,” said Cegielski.

While tariffs, the volatile stock market, world politics, recession talk and sinking consumer confidence have stressed out retail and fashion execs, real estate executives don’t seem so perturbed, and are busy redeveloping to bolster already productive “A” properties, or awaken moribund centers. There’s been a post-pandemic rebound for the shopping center industry which has been morphing from traditional mall formats to fresher mixed-use settings in many cases.

Brookfield Properties

Kevin McCrain, chief executive officer of retail at Brookfield Properties, said: “Some of our malls are fully occupied and have had waiting lists for years. While this is pretty frequent at our iconic properties like Tysons Galleria near Washington D.C. and Oakbrook Center near Chicago, we are now seeing similar levels of demand in growing markets like at Kenwood Towne Centre in Cincinnati and Plaza Frontenac in St. Louis.” Brookfield manages 1,100 properties globally, covering 395 million square feet, and has 40 million square feet under development. The company’s occupancy rate stand at 94-95 percent.

“A critical component to our strong occupancy is our curation strategy,” McCrain said. “Our team reassesses brands during lease renewals to ensure they maintain an emotional connection with customers, and thoughtfully cluster tenants near complementary brands to enhance the shopping experience.”

Brookfield’s The Shops at La Cantera has drawn 30 first-to-market brands to San Antonio in the past five years, including Louis Vuitton, Gucci, Dior, David Yurman, Marc Jacobs, Golden Goose, Aritzia, Alo Yoga, Nike, Warby Parker and Fabletics, TravisMathew, Mizzen & Main, Yeti, Haywire, Southern Tide, Gorjana, Chanel Beauty and Brandy Melville. Oakbrook Center, where since 2012 Brookfield has invested $300 million, has executed over 80 deals with more than 20 being first-to-market, including CD Peacock, Google, Anine Bing, BYLT, Vuori, Arc’teryx, YSL, Gucci, Louis Vuitton, New Balance and Buck Mason.

Simon Property Group

David Simon, chairman, CEO and president of the Simon Property Group, the nation’s largest shopping center owner and developer, told analysts last week that leasing demand “is still strong and we haven’t seen, by any stretch of the imagination, an across-the-board reduction.”

Shopper traffic in shopping centers is “holding up. The malls are actually performing above and the outlets are relatively flat,” Simon said.

Simon’s agenda includes construction in the coming months on, among other projects, a residential development at Brea Mall in Brea, Calif; new retail, dining and outdoor spaces coming to The Shops at Mission Viejo in Mission Viejo, Calif., and the redevelopment of a former department store at The Fashion Mall at Keystone in Indianapolis, Ind.

Macerich Co.

“Landlords, especially with their best real estate, are always looking to change their merchandise mix,” said Michael Guerin, executive vice president of leasing for Macerich Co. which currently owns 41 million square feet of real estate, consisting primarily of interests in 38 retail centers. “We always look at different retailers to see how they are performing. Our teams are sharply focused on listening to consumers and their needs and on retailers for how they describe their customer. We are looking at demand, what retailers have the open-to-buy, 18 to 36 months out.”

While Macerich ended 2024 with a 94.1 percent occupancy rate, up 60 basis points from 2023, “There are still opportunities to capture locations for new tenants. Now we are on par with pre-COVID levels,” Guerin said.

In terms of shopper traffic and how much consumers will spend this year, “There is a lot of uncertainty but even in the cyclicality of consumer shopping, people want to get out, dine out.”

Macerich is in the final stages of a second redevelopment of Scottsdale Fashion Square in Arizona, involving curating the merchandise mix and creating a stronger F&B presence with Nobu, Ocean, Francine, Ocean 44 and Toca Madeira, among the additions. Catch, the seafood and steakhouse, is opening in fall of 2025, and Din Tai Fung for Taiwanese food opens in the fall of 2026. Telefèric Barcelona, for Spanish tapas, is also opening soon. On the luxury side, Dior and Christian Louboutin opened; Cartier expanded; Gucci had a dual-gender store but opened a separate men’s store complementing its women’s store. Hermès signed a lease, Louis Vuitton is relocating and expanding its presence by 50 percent by combining its men’s and women’s stores, among other changes. Two years ago, a 35,000-square-foot Lifetime Fitness center was added. Changes were motivated by the area’s growth in employment, residential population and tourism. The center is anchored by Neiman Marcus, Macy’s, Dillard’s, Nordstrom, Dick’s and a Harkins Theatre. When Barneys New York closed, the space was filled by Apple and Industrious, a coworking office space.

Macerich’s Flatiron Crossing, a two-level, 1.4 million-square-foot, super regional center north of Denver, one of the fastest growing areas of the U.S., is building a 25-acre, HiFi mixed-used destination with shopping, dining, entertainment, and a 345-unit luxury residential community. Pindustry, the entertainment company with bowling, arcade games, food, cocktails, live music and dancing, will open at HiFi in early 2027. Expected in the future, some repurposing of some of the anchors, as yet undisclosed. The anchors are Dillards, Macy’s, Dick’s, and AMC Theaters.

CBL Properties

“Malls always have re-merchandising opportunities. It’s a consistent part of the business. We are always re-merchandising, but it does get harder as occupancy goes up,” said Stephen D. Lebovitz, CEO of Chattanooga, Tenn.-based CBL Properties which has about 95 properties including malls, and outlet, lifestyle and open-air centers primarily in the Southeast and Midwest.

CBL has taken advantage of closings by Sears, Bon-Ton, Macy’s and other retailers to put the space to new uses. “Younger generations like to get out and shop in stores more often versus just shopping online. Adding entertainment and food options has helped draw bigger crowds,” Lebovitz said. “After COVID[-19] and all the bankruptcies, we’ve seen traffic up for the last few years, and a resurgence in interest in enclosed malls. We haven’t seen yet the evidence of a recession or people pulling back.” He suggested consumers did some stockpiling to get ahead of tariffs, but said CBL is to a large degree insulated from the impact of tariffs. “Most of our revenue is fixed per leases. Our percentage rent is like 2 percent of our revenue. We’re not going to feel it immediately if there is an impact of tariffs on consumer spending.”

CBL’s CoolSprings Galleria, a 1 million-plus-square-foot regional enclosed mall 15 miles south of Nashville, anchored by Belk, Dillard’s, and Macy’s, is undergoing “a comprehensive densification” with plans to redevelop a JCPenney and parking lot with about 235 upper-income apartments and service retailers. Recent additions to the center included Garage, The Normal Brand, and Barnes & Noble. Primark is opening soon. Last December, CBL Properties announced that it had closed on the acquisition of its partner’s 50 percent joint venture interests in CoolSprings Galleria as well as Oak Park Mall in Kansas City, and West County Center in St. Louis,

At CBL’s Friendly Center, a large open-air shopping center with Belk and Macy’s situated on 126 acres in the heart of Greensboro, N.C., work is underway to add foot concepts — Cooper’s Hawk, First Watch, North Italia, and French artisan bakery Tous les Jours — as well as two new retailers, Lego and Rowan, in space that Lebovitz said had legacy retail, such as New York & Co. Also, CBL bought part of a Sears building to develop apartments.

Pacific Retail Capital Partners

Pacific Retail Capital Partners, a real estate investment group managing 24 million square feet of regional, open-air, lifestyle and mixed-use centers, focuses on repositioning basic malls into mixed-use properties. The mission, “has really accelerated post pandemic,” said Steven Plenge, CEO of PRCP. “It can involve something as dynamic as tearing it all down like at the Galleria in White Plains, N.Y., or it could be a more targeted approach replacing a vacant anchor.”

Among the nation’s most ambitious projects is PRCP’s transformation of the former White Plains Galleria into “District Galleria.” The $2.5 billion project has involved tearing down the mall, purchasing the former Macy’s property, developing 3,200 residential units in seven towers, adding 225,000 square feet of retail primarily food, health and wellness, basic amenities, like a gym, and devoting 46 percent of the project’s square footage to green space open to the public, with parks, gardens, plazas, dog parks, residential rooftop gardens and event space. “It’s a residential-led project,” said Plenge. “What is constantly missing in a lot of downtown projects is green space. It helps to stitch all the pieces together, and draws people through the project,” Plenge said.

At the 1.5 million square foot Yorktown Center, in Lombard, Ill., a Chicago suburb, PRCP in partnership with Synergy Construction, a former Carson Pirie Scott department store is being replaced by 600 apartment units, lots of green space and a park designed for concerts and pop-ups. The center is bringing in new retail and dining options, among them a Fresh Market. Not long ago, it added Dave & Buster’s, Tapville Social, Empire Burgers + Brew and Ancho & Agave.

With any redevelopment, Plenge said, the key is to stay relevant with the community, which often entails bringing in local food operations such as a bakery or fast casual restaurant augmenting national restaurants and food establishments. At Pacific Retail’s Bridgewater Commons, an enclosed shopping mall in New Jersey, 19 leases were signed in the past year, including bringing in a Millburn Deli, billed as “a regional mainstay” offering classic chicken, beef, turkey and “vegetarian-ish” sandwiches and salads. “Having that curated mix of food is super helpful,” Plenge said, particularly given trade wars and tariffs impacting the flow of imports to the U.S., which he says could really affect retailers’ back-to-school business. “The consumer is in pretty good health, and we have confidence that the food and the entertainment side will do well. It’s really a matter of what happens in the apparel side, more than anything.”

O’Connor Capital Partners

O’Connor Capital Partners of New York is redeveloping the former Saks Fifth Avenue at The Esplanade, 150 Worth Avenue in Palm Beach, Fla., which will be designed by Fairfax & Sammons Architecture.  The project will transform the 50,000-square-foot, two-level space into a luxury destination for retail, office space, and lifestyle offerings. “The Esplanade has long been a cornerstone of high-end shopping in Palm Beach and its redevelopment represents an exciting next chapter,” said Bill O’Connor, CEO of O’Connor Capital Partners, which develops and invests in residential, retail, industrial and boutique office sectors in the U.S. and Mexico.

Time Equities

Ami Ziff, managing director of national retail for Time Equities which has a portfolio of 342 properties covering 43.2 million square feet of residential, industrial, office and retail space, said it’s not so easy knowing what re-merchandising opportunities are out there. “There have been bankruptcies, but just because a retailer is bankrupt doesn’t mean the store goes away. We have taken some boxes back, but there are several tenants in bankruptcy still that we don’t have control of the space and we may not. It’s hard to know what the re-merchandising opportunity is and can be.”

Time Equities’ Gateway Plaza in Fort Pierce, Fla., north of West Palm Beach, which has been just 10 percent leased, is being revitalized in a $30 million project bringing in new retailers including Ross Stores and Burlington Stores, new facades, new roofs, in what amounts to basically a reconstruction, above and below ground, and is about 85 percent rented. Two outparcels were added, for a Starbucks and a TD Bank. “This has been a heavier lift than we typically do,” said Ziff. “We typically look for assets not completely broken, but we had a gut feeling we could make this one better.

Elsewhere, Time Equities has been busy injecting new life into properties. At the Foothills Mall, in Maryville, Tenn., a large redevelopment involved tearing down two anchors JCPenney and Sears, which were replaced by a BJ’s Wholesale Club and a Publix grocery store. Monroe Crossings Shopping Center in Monroe, N.C., also bucked the trend of malls going by the wayside, replacing a vacant Sears with a furniture retailer and a JCPenney into a Rose’s fashion store.

Tanger

In November of 2023, Tanger acquired two new properties, Bridge Street Towne Centre in Huntsville, Ala., and Asheville Outlets, in Asheville, N.C. Huntsville was the company’s first full-priced center where Warby Parker, Starbucks, and Lego and Apple expanded. In Asheville, Tanger saw an opportunity to enhance the center in this high growth market. Throughout the last year and a halve several new brands have come in — Aerie, Columbia, Crocs, Buckle, and Simply Southern among them — to replace stores that were underperforming.

In addition to purchasing new centers, Tanger has been renovating and upgrading its portfolio, including the Sevierville Center in Tennessee. In addition to several facility upgrades, the center is partnering with the famous art duo known as “Gillie and Marc” who have created public art across major cities. They are working on an interactive sculpture program that responds to the neighboring natural landscape.   

The Charleston renovation focuses on modernizing and updating the color palette while including market-specific elements that align with the community. Tanger is updating branded signage, installing lighting enhancements, landscaping and furniture improvements, as well as creating a common area court designed to encourage shoppers to spend time and relax. 

Not long ago, Shake Shack started opening at Tanger properties, “Restaurants are paying more attention to outlets than ever before,” said CEO Stephen Yalof. With full-price centers now part of the portfolio, Tanger is no longer just an outlet center operator and now gets “a seat at the table” with full-price retailers that previously didn’t lease with it, said Yalof. “We’re seeing continued momentum in our re-merchandising strategy to elevate and diversify our tenant mix as we replace less productive tenants and add more desirable retailers, restaurants, and entertainment across our portfolio.”

ICSC’s Cegielski said: “Those bankruptcies and store closures are a great opportunity right now for retailers to get space that they’re desperately seeking to find, and you’re seeing some of those discount brands [aggressively] doing it because consumers are really shopping the discount brands and are conscientious about price. Many properties have tried to recession-proof themselves by diversifying their tenant composition so it’s not all apparel or what not. It’s that mix of housing, fitness, grocery, health and wellness, or services.”

The nation’s shortage of housing and shifting populations, as well as the turnover in the retail sector, is motivating developers and landlords to re-merchandise their shopping centers and add residential units. “With a mall that has to shut down, it’s still a great footprint to build a small community with housing, groceries, an urgent-care, because you’ve got the parking and a large plot of land,” Cegielski said. “It’s been a trend for probably 10 years, but we’re seeing more of it.”