Retail Real Estate Finds Strength in Off-Price Stores Amid Wave of Closures Article originally posted on Globe St. on October 2, 2025 Retail real estate is experiencing a paradox. Even as some of the country’s best-known chains shutter stores or vanish entirely, other retailers — particularly those targeting value-conscious shoppers — are thriving, creating both turbulence and opportunity for investors. Chains such as Joanne, Big Lots, Party City, Advance Auto Parts, Walgreens, and Lumber Liquidators have either closed large numbers of locations or gone out of business, leaving behind swaths of vacant space. Yet the overall retail market has remained surprisingly stable. Brandon Svec, national director of U.S. retail analytics for CoStar Group, tells GlobeSt.com that off-price retail strategies remain among the sector’s most “resilient and best-performing” categories. “The retail landscape overall from a space perspective looks very healthy,” Svec says. “The really big wave of closures in the wake of bankruptcies were idiosyncratic.” He points to a mix of factors behind those failures, from over-leveraged balance sheets to weak brand recognition, as well as the challenge of competing against giants like Amazon and Walmart. The pandemic, Svec adds, actually prolonged the lives of several troubled chains. “Bed Bath and Beyond lasted longer than expected,” he notes. But while pandemic-related demand provided short-term relief, broader structural problems eventually caught up with many retailers. Today’s conditions present a far different picture. Over the past decade, developers have demolished 250 million square feet more retail space than they have built on a speculative basis, according to CoStar. “What that’s done is lower the threshold of demand we need to keep the market balanced,” Svec says. Another shift has been the growing role of service-based tenants such as fitness centers, medical providers, and personal care businesses, which have leased more space over the past year than goods-based retailers. “It correlates well with how consumers are spending their money,” Svec says, adding that services are far more resistant to e-commerce competition because they require in-person visits. Combined with the wave of bankruptcies and closures that have already played out, the market now contains leaner, more financially resilient players. “You couple that with we have gone through a fair amount of bankruptcy and closures, what you have now is a retail sector without as much fat,” Svec says. “The credit profile looks much stronger.” Off-price retailers are benefiting most directly from the financial strains on consumers. “When you look at the savings rate and the rise in debt across auto loans, student loans, credit cards, most consumers are living on very thin margins,” Svec says. “Consumers don’t have a lot of discretionary spending at this time. We’re seeing a lot of emphasis on value spending.” Brands like Dollar Tree, Dollar General, T.J.Maxx, Burlington, and Walmart are thriving in this environment, Svec says, because they are “perfectly in line with consumers seeking value in what has become a high-cost environment.”