**Top Takeaways from ICSC Monterey, March 2025**
*By Dan Friedeberg, CEO, Slatt Capital*
The ICSC Monterey event recently brought together a dynamic mix of retail professionals, investors, and dealmakers from across the region. Attracting around 1,000 attendees, the conference provided a timely pulse-check on the retail real estate market—and revealed promising signs for the future.
Here are the key takeaways from the event:
**Optimism Is in the Air**
The overall sentiment at the conference was positive and forward-looking. While 2023 and 2024 were characterized by caution and unpredictability, there’s growing confidence that 2025 will be a strong year for the retail sector. Many industry players are now eyeing new opportunities as market fundamentals begin to stabilize and capital sources become more active.
**Buyers and Sellers Are Becoming More Realistic About Pricing**
Though retail investment sales remain below their 2022 peak, a shift in buyer and seller expectations has created a more functional marketplace. This growing realism is helping transactions close more smoothly than in previous years, laying the foundation for increased deal activity in the near future.
**Retail Vacancy Remains Historically Low in Core Locations**
Despite broader economic challenges, vacancy rates in prime retail areas remain at historic lows. This is largely due to a lack of new development in key submarkets, which has sustained strong demand for well-located existing retail assets.
**Lenders Are Supporting Retail Again**
With the sector demonstrating resilience and performance, lenders are offering favorable loan terms—both in pricing and structure. Retail is now viewed as one of the more attractive property types to finance, reinforcing confidence in its continued stability.
**Cap Rates for Quality Assets Are Holding Steady**
One notable trend highlighted at the conference: capitalization rates for high-quality retail assets have remained relatively unchanged over the past two to three years. This steadiness persists across both single-tenant and multi-tenant assets, underscoring investor demand for stabilized retail, even amid a shifting interest rate environment. Quality remains king.
**Conclusion**
The ICSC Monterey event reaffirmed that retail is evolving and weathering market changes with resilience. With more aligned pricing expectations, continued demand in core locations, and ongoing investor interest in quality assets, the outlook for retail in 2025 is decidedly optimistic.
