The retail real estate landscape continues to evolve, and 2025 promises exciting opportunities and challenges. Experts from Rappaport recently shared their insights on what the future holds. Drawing from their expertise, this blog outlines key trends and predictions in suburban and urban retail, tenant mixes, consumer behavior, and emerging technologies. Here’s everything you need to know.
Rappaport President Henry Fonvielle recently spoke at the Icons of D.C. Area Real Estate panel “2025 Forecast and Lessons for Young Professionals,” sharing his vision for 2025. He noted two stand-out trends:
New Opportunities in Urban Retail
Urban retail is on the brink of transformation. Fonvielle anticipates that high-profile urban redevelopment projects are creating fresh possibilities. For instance, plans to reposition Metro Center, a recently acquired downtown D.C. office building, signal a dynamic shift for urban retail spaces. These projects will provide dramatic new opportunities for D.C. retailers.
Suburban Grocery Shopping Centers Will Stay Strong
According to Fonvielle, suburban grocery-anchored shopping centers will continue to thrive. Strong demand is driving high occupancy rates and rising rental prices, making these properties a robust investment.
Susan Bourgeois, Rappaport Executive Director of Leasing and Brokerage echoes this suburban optimism. With the DC Metro area’s vacancy rate at historic lows, both suburban and urban retail spaces hold value. However, suburban markets are experiencing particularly high occupancy rates, the highest levels since before the Great Recession. Retail developers will have to creatively address store closures by legacy brands like CVS or Walgreens to capitalize on emerging opportunities.
Bourgeois highlights several other critical factors reshaping retail real estate, including consumer behavior, technology, and tenant mix.
Rising Interest Rates & Construction Costs Will Continue to Impact Retail
Bourgeois pointed out that higher interest rates and elevated construction costs will continue to impact retail real estate development, maintaining pressure on both tenants and landlords to adapt.
Consumer Behavior is Evolving
Shoppers today continue to treat shopping as an experience—but not all shopping experiences are equally appealing. Omnichannel strategies and e-commerce adoption are expected to deepen, further diversifying how shoppers interact with physical retail spaces.
Influencers Are Reshaping Retail
Social media influencers are transforming how consumers experience and perceive retail. Whether it’s the WNBA Tunnel Walks or chef David Chang’s culinary insight, these channels influence purchasing decisions. Retail developers and marketers will need to focus on visual appeal and spaces that “shine” on platforms like Instagram and TikTok.
Emerging Retail Stars
First Watch and Tatte are two fast-growing brands gaining traction in the breakfast and brunch segment, and both are poised for aggressive expansion throughout 2025. These brands are reinvigorating the morning restaurant market with exciting dining concepts.
Bourgeois predicts that tenant mixes will increasingly focus on food, restaurants, and personal services. More grocery stores, health & beauty services, and experiential dining options will fill retail developments, balancing consumer preferences and demand.
From Director of Leasing and Brokerage Thomas Bolen III’s perspective, the retail market will shift further toward value-oriented retail and strategic leasing solutions, and this will be reflected in tenant mixes.
Bolen highlighted the continued rise of off-price and value-focused brands such as Burlington, Dollar Tree, and Trader Joe’s. With consumers tightening their belts amid economic pressures, these brands are flourishing as they cater to an audience increasingly focused on affordability.
Despite growing demand, record-high occupancy rates are managing to limit leasing activity. Bolen anticipates leasing volume constraints as landlords prioritize tenant retention over new deals. This will push landlords to emphasize adapting existing spaces to maximize long-term lease value while helping retailers focus on cost efficiency, product quality, and convenience to stand out in competitive markets.
Final Thoughts
The predictions from Rappaport’s retail advisors illustrate how the retail real estate market is adapting to challenges and opportunities alike. Suburban centers remain strong investments, while urban redevelopment projects hold the promise of reinvention. Consumer trends and influencer impact mean retail spaces must align with modern lifestyles, as value-oriented retail dominates amid economic pressures.
Looking to gain more valuable insights? Susan Bourgeois will be joining an esteemed panel of women for the CREW Northern VA CNCC 2025 State of the Market panel on January 23. At this annual event, CREW Northern Virginia CNCC brings together top real estate professionals in the metro area to discuss the direction of the market.
Click here to register today.
Interested in learning how you can capture these trends to stay ahead in 2025? Contact us today to discuss your retail real estate needs with one of our trusted retail advisors.
