Every year, the International Council of Shopping Centers (ICSC) has a multi-day conference, where leaders in the US shopping center space come together to discuss trends, updates, challenges, and opportunities in the industry.
This is one of the best temperature checks on retail real estate. For three days, leaders from across RockStep Capital's departments met with retailers, brokers, lenders, capital sources, mall owners, and redevelopment partners.
This year’s conference was held in Las Vegas, and it did not disappoint.
Conversations show retail is strong, with tenants eager to open stores and willing to pay higher rents and more flexible lease terms. While tenants once held most of the leverage, landlords now have increased influence, especially with prime properties and favorable terms, though not every deal succeeds.
Here are the 10 biggest takeaways from ICSC Las Vegas, straight from the RockStep Team to you.
Retail remains strong as tenants seek stores, share growth plans, explore markets, and show flexibility, often paying higher rents.
For a long time, retail talk focused on e-commerce, department store struggles, mall closures, and consumer pressure. But at ICSC, Amazon, consumer stress, debt, interest rates, and the China shock were rarely discussed. The focus was on growth.
Ross, TJ Maxx, Burlington, Five Below, Academy, Dunham’s, Aldi, Chase Bank, Shoe Show, Barnes & Noble, Crunch Fitness, Office Depot, Ollie’s, Buckle, Cavender’s, Raising Cane’s, and others drive traffic, attract lenders, satisfy customers, and strengthen shopping centers. When tenants want to grow, landlords with suitable real estate gain an advantage.
The key point is that leverage is changing, but hasn't fully shifted to the landlord. Good retailers remain cautious, focusing on rent, co-tenancy, parking, access, visibility, market size, and profitability. However, the market has changed.
The leverage has shifted from the tenant to the landlord, though not completely. That is a big deal because when tenants need to grow, they cannot just sit back and wait for the perfect deal. They have to make decisions. They have to enter markets. They have to secure sites. And they have to be realistic about what rent needs to be in today’s environment.
Construction and rising interest rates increase costs for new stores. Retailers seek transparency on expenses such as construction, redevelopment, incentives, site work, and capital to have rational discussions, respond to logic, and avoid feeling ripped off. If economics justify higher rent and the store is viable, retailers must consider paying it, creating a healthier market for landlords.
The strength of retail demand is especially important for RockStep because much of that growth is moving into smaller markets. They need to expand, and they are doing so in smaller markets.
The RockStep strategy is logical because HomeTown markets have clear competition, lower real estate costs, engaged communities, and strong tenant prospects. Unlike major cities where new stores eat into sales, HomeTown markets enable retailers to meet unmet demand, fostering growth.
These markets have lower occupancy costs and less new supply because high construction costs deter new competition, creating a predictable environment.
When evaluating a HomeTown market, we ask:
If those fundamentals are there, we get interested. And ICSC confirmed that retailers are interested too.
Tenants avoid closing stores, even underperforming ones, to prioritize top-line revenue.
Retailers aim to meet overall chain sales goals, so they value even underperforming stores that contribute small but necessary sales to avoid losing revenue.
That changes the landlord-tenant conversation. Not every store stays open forever, and retailers prioritize profit, but there's often more motivation to keep stores open than many realize. Kohl’s isn't leaving markets without a good buyout. Office Depot isn't just closing profitable stores. Belk appears more stable than expected. JCPenney is selective and specific about stores.
The lesson is simple: don't lump all tenants together. Underwrite each store, lease, market, and relationship. An underperforming store might be a problem, a negotiation, a redevelopment opportunity, or still valuable if the tenant wants to keep sales. Experience matters.
One of the most practical takeaways from ICSC is that several RockStep projects have real follow-up momentum, especially Hot Springs and Opelousas.
Our property in Hot Springs was a point of focus, with meaningful conversations around this property about Target, Academy, TJX, Aldi, Cavender’s, Shoe Show, Raising Cane’s, Chase Bank, JCPenney, and others. The project still has to work physically, economically, legally, and operationally. But tenant interest matters because redevelopment does not start with a site plan. It starts with demand.
Opelousas also came up repeatedly. Ross, Aldi, TJX, Five Below, Academy, Ollie’s, Dunham’s, and Cane’s are all part of the conversation in different ways. Not every deal will happen. But when that many tenants are relevant to a project, it tells you there is enough activity to keep pushing the strategy forward.
ICSC's value lies in directly engaging with tenants and brokers to understand what's real and decide on next steps, making meetings meaningful when they lead to outcomes such as calls, site plans, LOIs, leases, capital decisions, or redevelopment plans.
Tenant demand boosts shopping center values as construction costs rise; tenants are willing to spend more. Values increase as cap rates fall.
This creates an important shift. Previously, retail real estate had the advantage of buying existing shopping centers at a significant discount to replacement cost. While this remains relevant, the gap between replacement cost and existing values per square foot has narrowed, increasing the tendency for new construction.
Owners must be more disciplined, making good existing real estate more valuable. High construction costs boost the second-generation space's appeal. If new development is costly, an existing building with parking, access, visibility, utilities, and a prime location is a significant advantage.
RockStep revitalizes old retail spaces by transforming vacant areas and mall components into exterior-facing retail, entertainment, sports, services, or mixed-use spaces. We focus on leveraging valuable assets and reconfiguring or removing less useful parts to create value efficiently in high-cost environments.
The mall market is no longer a single market. There are A and A-plus malls that are very strong. There are B malls in secondary and tertiary markets, where values are steady and rising slightly. And there are weaker assets, where the future depends heavily on ownership quality, architecture, capital, and redevelopment potential.
Mall values are steady but rising slightly in B malls in secondary markets, and very strong in A or A-plus malls. This distinction matters: A mall isn't necessarily a bad investment, but without a strategy, it's a poor choice.
Ownership quality matters, with a clear divide between owners who reinvest and those who deplete assets. Some withdraw cash and minimize spending, while others reinvest, redeploy, and build long-term value, revealing the difference over time.
For RockStep, opportunity can exist in complicated real estate. But complexity alone is not enough. We need tenant demand. We need the right architecture. We need community support. We need a strategy.
That strategy starts with the engine. Redevelopment succeeds because of a use that drives traffic and momentum, not just a pretty site plan. The engine, which can be an indoor sports complex, casino, big tenant, or medical, office, educational, or residential use, is crucial for mall redevelopment.
That is how the RockStep team thinks about redevelopment. You need something that gives the project momentum. It may be TJ Maxx, Aldi, Ross, Five Below, Barnes & Noble, Dunham’s, Crunch Fitness, OneLife, Dave & Buster’s, a sports complex, a medical use, or even a casino.
One of the more interesting things we heard was that one operator has opened five casinos in shopping centers and has done very well. That would have sounded unusual years ago, but now it makes sense. If a use drives traffic, fills space, and supports the asset's economics, it can become a redevelopment engine.
That is the work. Identify the engine. Understand the cost. Align the community. Structure the incentives. Create a site plan that the tenants can live with. Then execute.
Even with the right engine, redevelopment depends on the physical and legal realities of property. Layout matters: Can tenants face outside? Is there enough frontage? Can boxes be divided? Is parking available? Can trucks load properly? Are there consent rights, co-tenancy restrictions, or anchor approvals? These details influence whether redevelopment is easy, hard, expensive, or impossible.
JCPenney is a good example: JCPenney is currently one of the most challenging anchors in terms of the consents required to redevelop an asset. Other large anchors are often more cooperative, but if JCPenney's consent is required, the process can take a long time and be very expensive.
We don't avoid assets with JCPenney, but we must understand the risks involved. Redevelopment involves legal, site plan, construction, leasing, and relationship work. The visual appeal is easy; the challenge is aligning architecture, leases, permits, costs, and tenant needs.
All of this is happening in a capital market that has started to pay more attention to retail again. There is a lot of capital chasing real estate because it’s been on the sidelines for so long, and capital has gotten squeezed in multifamily and industrial.
Owners and buyers must underwrite carefully, as sustained high debt costs could pressure real estate values.
At the same time, capital markets are evolving. We heard that large operators are using the Israeli bond market and SASB financing for very large enclosed malls. The Israeli bond market is interesting because its threshold is much lower than that of the US bond market. That means you can take smaller portfolios and secure more debt on better terms.
That doesn't work for everyone. It requires scale, structure, and sophistication, yet it shows that capital is seeking ways to finance retail. The lesson isn't that capital is easy, but that it's available for the right story, which still needs strong fundamentals such as a solid basis, a strong market, tenant demand, realistic NOI growth, community alignment, and disciplined execution.
ICSC showed that retail has momentum, but momentum alone is not a strategy. Retailers are expanding, capital is interested, and communities want these properties to succeed. The opportunity is real, but it still has to be earned.
For RockStep, the work is in the hard parts: buying at the right basis, attracting the right tenants, solving the architecture, aligning with local partners, and moving projects from idea to execution.
The real value will not come from the meetings in Las Vegas. It will come from the follow-up calls, site plans, leases, incentives, capital decisions, and projects that are actually built. That is where RockStep can make its mark.