Retailers Hit Pause on Leases Amid Tariff Turmoil

Retailers are growing hesitant to sign new leases as they face rising costs tied to sweeping new U.S. tariffs. Real estate experts like Robin Abrams, vice chairman for retail at Compass in New York City, report that long-negotiated deals are now unraveling. Abrams recently saw a grocery store tenant back out of a Manhattan lease, citing concerns over soaring food and construction material costs.

The tariffs, introduced by President Trump, include a 10% across-the-board increase and a staggering 145% on Chinese goods. Since the announcement, stock markets have been volatile, consumer spending has slowed, and retail leasing activity has cooled significantly.

Retailers across sectors — from apparel to electronics to restaurants — are either stalling deals or rethinking their strategies. Some, like Hastings Bath Collection, are partially absorbing tariff costs, while others are passing them on to consumers. Major retailers such as Walmart, Best Buy, and Target have already warned of impending price hikes.

Despite the slowdown, experts note that national retail vacancy remains low at 5.5%, and available spaces are still being snapped up quickly. The tight supply of retail spaces could cushion the broader market from a severe downturn, but uncertainty around the future of tariffs keeps both tenants and landlords in a cautious holding pattern.

For now, brokers, landlords, and retailers are stuck waiting for clarity. As Bill Miller of Miller Walker put it, in real estate, the worst answer you can get isn’t “no” — it’s “maybe.”

Read more about this in the original article written by Ciara Long:

https://www.bisnow.com/national/news/retail/as-retailers-brace-for-tariffs-their-brokers-contend-with-uncertainty-129064?utm_source=outbound_pub_236&utm_campaign=outbound_issue_85510&utm_content=link_text&utm_medium=email