H1 Retail Sales Surge; Eastdil Overtakes JLL
Large trades of retail properties jumped 35% in the first half as more investors bet on bigger deals and the sector continued a recovery in trading that began last year.
Some $14.26 billion of deals worth at least $25 million closed from January through June, up from $10.54 billion in the prior-year period, according to Green Street’s Sales Comps Database. Eastdil Secured held a commanding lead over defending champion JLL in the brokerage race at midyear, followed by CBRE and Newmark in third and fourth places.
After the pandemic crushed the sector, a nascent sales rebound was interrupted by rising interest rates. Market pros said that led to pent-up demand for dealmaking. The dam broke last year, and the market has gained steam this year amid an improving debt market and a strong leasing market.
“We’ve been waiting for the capital-markets side to catch up with the fundamentals side of retail,” said Chris Gerard, a senior managing director at JLL. “All of a sudden, capital has really taken notice of how well-performing [the sector] has been in recent years, and a lot of new equity has been raised to go buy retail. … In the first half of 2025, institutional and REIT investors made up a larger percentage of transactions.”
Adam Ifshin, chief executive of DLC Management, said both buyers and sellers were motivated in the first half. Sellers had put off disposition plans during market dislocation spurred first by the pandemic and then by rising interest rates. But they began to pivot in the second half of last year.
“We knew there was going to be a lot of product, that was number one,” Ifshin said. “Number two: We knew there were large amounts of capital forming that were moving from retail curious to retail committed.”
Nationally, retail space was 95.1% occupied at midyear, according to a CBRE report. There were some retailer bankruptcies that led to a slight uptick in vacancy this year, but construction remains muted, instilling confidence in the long-term trajectory of the sector.
“There has been no new supply for retail for 12 years,” said Chris Decoufle, leader of CBRE’s retail capital-markets team. That’s making the sector increasingly attractive to investors compared with other property types — especially industrial and multifamily, which offer lower capitalization rates that may prove unsustainable.
“Returns are temporary, basis is permanent,” Decoufle said. “Returns, what you make every year, can go up and down depending on the market. But if you are buying an asset at half what it costs to replace, you have a margin of safety that doesn’t translate to the other product types right now. The shift into retail isn’t just fashionable. It is based on very solid footing.”
The weighted average per-sf price for trades in the first half was $326, up dramatically from last year’s annual average of $235/sf and the highest level since 2016. But that average remains well below the $450/sf to $500/sf it can cost to build new centers, and construction costs continue to rise.
Furthermore, market pros noted the higher per-sf sales average likely was skewed by a handful of trades involving large trophy centers and high-street retail properties, such as Scottsdale Quarter in Scottsdale, Ariz. ($645.1 million, or $835/sf), Brickell City Centre in Miami ($512.6 million, or $1,367/sf) and the retail condominium at 666 Fifth Avenue in New York ($350 million, or $20,290/sf).
But those deals also show how investors have grown increasingly comfortable with larger purchases. The average deal size in the first half was $77.6 million, up 18% from 2024 to reach a nine year high. Some 28 deals topped $100 million during the six-month stretch, up from 19 a year earlier, including 11 that exceeded $200 million.
Ifshin, of Elmsford, N.Y.-based DLC, attributed the larger trades partially to investors working to shift capital from the office sector, where individual deal sizes tend to be bigger.
“When you are moving away from CBD office and gateway city office … it is inefficient to go buy [one or two] $50 million grocery-anchored shopping centers” he said. “So, I think you are seeing a willingness on the part of [investors] to expand on deal size, particularly if they’re not constrained by a finite hold period.”
JLL’s Gerard said more big deals are on the way. Indeed, last week, Bain Capital and 11North Partners paid $395 million for 10 shopping centers in Florida and South Carolina, mostly anchored by grocer Publix. JLL represented the seller, PGIM Real Estate.
“If investor appetite continues to increase at the pace it did in the first half of the year, you can expect more larger trades and maybe more portfolios, which we haven’t seen many of
recently,” Gerard said.
To be sure, some pros cautioned that sellers’ price expectations are becoming increasingly optimistic, which could hold up dealmaking. But Kevin Gerrity, president of Gerrity Group, noted that “buyer and seller expectations are always mismatched.”
His Solana Beach, Calif.-based fund shop has been on both sides of the trade recently, he said, and “right now, the gap is smaller than it has been in years; the increase in closings in the first half of this year is evidence of that.”
Broadly, market pros say trading momentum is set to continue in the second half of this year. While volume is unlikely to match the recent peak of $36.55 billion during the outlier year of 2022, the consensus is that 2025 is on pace to exceed annual volume for all other years since 2016.
“Leasing fundamentals and portfolio performance are driving our conviction about stepping in and deploying capital, … and I suspect some other [investors view the market] similarly,” DLC’s Ifshin said. “I think you are going to see a ton of trading in the second half.”
In the brokerage race, Eastdil boosted its sales volume 78% year over year to $3.64 billion, lifting its market share to 35.5% from 28.9%. JLL, which has won the brokerage crown for the past four years, slipped to second place, with $2.39 billion and a 23.2% share, down from 27.9% last year. CBRE followed with $1.43 billion (13.9% share), followed by Newmark with $1.28 billion (12.4%).
Broker rankings are based on property transactions that closed from January through June and involved full or partial stakes valued at $25 million or more. When multiple brokers shared a listing, the dollar credit was divided evenly, but each broker was credited with one transaction. Only brokers for sellers were given credit. Portfolio transactions were included if the package price was at least $25 million.
