Strip Malls Enjoy Major Image Makeover

Rolesville Town Center - Rolesville, NC

Strip malls were once the plain-Jane stepsisters of the retail world. But now the sector is in the middle of a glow-up, far outdoing its more well-regarded shopping mall siblings for foot traffic, attracting new investor interest and, according to one of strip malls’ most CRE-famous advocates, enjoying the “hottest leasing market that we’ve ever seen.”

It doesn't hurt that strip mall businesses are largely online shopping-proof as well. Suburban strip malls often include local tenants like hair & nail salons, restaurants and medical/dental offices.

Strip malls have also benefited from tailwinds from the pandemic. People who work from home now utilize local barbers and restaurants instead of the ones near their office. 

Trips to strip centers were up 18% in 2023 compared to data from before the pandemic, according to analytics company RetailStat, besting indoor shopping malls by a big margin.

And rents are on the rise. The nation's nearly 69,000 strip malls, typically centers without an anchor or anchored by a convenience store, saw nearly 3% asking rent growth year-over-year in Q3 and had the highest leasing rate of available space among all shopping centers at almost 46%, according to the latest retail outlook from JLL.

Strip malls also outperformed all other shopping centers with around 1M SF of absorption versus negative absorption for the segment as a whole through the first nine months of the year, JLL said. Strip centers have the second-lowest vacancy rate among retail types behind power centers, according to the report.

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