Why Retailers Are Buying the Buildings They Operate In
Retailers across categories are buying the physical spaces they operate in, and the past few years have brought a notable surge in these acquisitions. In a feature for Commercial Property Executive, writer Scott Baltic reports that everyone from grocery chains to luxury brands is acquiring real estate, citing deals such as Walmart's $34 million purchase of Monroeville Mall near Pittsburgh and Dillard's joint acquisition of Longview Mall in East Texas. Industry experts point to tight anchor vacancy, record-low new construction, and strong demand for quality space as the forces driving the shift.
Brian Connolly, founder and CEO of feasibility platform Feasibly, frames the trend as a convergence of factors. He explains that the market is supply constrained at a moment when top locations matter more than ever, with muted new construction and low vacancy making the best sites both scarce and increasingly strategic. Connolly notes that redevelopment has replaced new construction as the primary way supply reaches the market, prompting retailers to deploy capital directly into the assets they occupy so they can control timing, scope, and return on investment rather than depending on landlord-driven capital cycles.
Connolly also weighs in on whether buying retail space is an investment decision or a balance-sheet one, concluding it is both while observing that the investment case is growing more compelling. He points to picked-up transaction activity and stabilized pricing that make retail real estate a more predictable asset, allowing well-capitalized operators to convert a fixed occupancy cost into a long-term asset with optionality while reducing exposure to rent volatility.
The article gathers perspectives from across the industry, including Northmarq, Avison Young, CBRE, Cushman & Wakefield, and Colliers, with experts describing control over tenant mix, format, and customer experience as a central motivation. Luxury brands such as LVMH, Kering, Chanel, and Prada emerge as a particularly active category, acquiring flagship properties in gateway markets to anchor their presence and support brand equity.
