Marc Norman, Associate Dean at NYU’s Schack Institute of Real Estate, offers a clear-eyed read on what the wave of chain store bankruptcies and retail closures actually means for the commercial real estate landscape: challenge for landlords, and unexpected opportunity for small businesses. In a recent CNBC feature, Norman explains the dynamics reshaping shopping centres across the country and who stands to benefit.
The numbers tell the story. With the national vacancy rate in shopping centres rising to 5.8% in Q2 2025, spaces once locked up by large national chains are becoming available on increasingly negotiable terms. Norman explains the psychology driving landlord behaviour: “Vacant spaces signal that a location is struggling,” and that pressure pushes property owners to lower prices and welcome independent businesses in order to keep centres viable. “Consumers prefer to see occupied spaces; they do not want to walk past numerous empty storefronts.”
Norman is careful to note, however, that the opportunity for small businesses is not unconditional. Landlord strategy varies significantly, and in some cases owners may prefer to let vacancies accumulate rather than fill them with smaller tenants, particularly if the long-term plan is to sell the asset. “The decision might be that you want to empty the retail space to sell,” he warns. Most landlords, Norman explains, are still seeking what the industry calls credit tenants, typically large chains capable of paying six months’ rent upfront on multi-year leases. As those tenants grow scarcer, smaller businesses are getting a shot at prime locations, but only if they can make a convincing case to landlords willing to take the risk. As Norman puts it, “Will the Mom-and-Pop shop commit to a long lease?” – a question that captures the central tension small business owners must navigate in this reshaped retail market.
Leave a Reply