The retail landscape is evolving fast—and in 2025, smart investors are looking beyond just foot traffic and lease terms. With shifting consumer habits, hybrid shopping models, and resilient tenant types leading the charge, it’s more important than ever to know what truly makes a retail investment property stand out.
At Annie Scott Realty Group LLC, I help clients make strategic moves in today’s retail market. Here’s what to focus on when evaluating a retail investment property in 2025:
1. Tenant Mix That’s Built to Last
In 2025, tenant resilience is king. The most attractive properties include tenants who are essential, experience-based, or resistant to online disruption.
What to look for:
- Service-based tenants (salons, medical clinics, fitness studios)
- Quick-service restaurants (QSR) with drive-thru capabilities
- Local anchors that create loyalty and repeat visits
- National credit tenants with long-term lease history
In Indiana, combinations of local boutiques and national brands are working well in suburban retail centers across Carmel, Fishers, Greenwood, and Zionsville.
2. Location Still Reigns—But for New Reasons
Location has always mattered—but now, it’s about more than just visibility. In 2025, the best retail properties are in areas that serve growing populations and lifestyle-centered communities.
What to look for:
- Population growth and residential development nearby
- Proximity to major roads, schools, and healthcare hubs
- Strong daytime population (office parks, warehouses, schools)
- Submarkets with walkability and mixed-use momentum
Emerging retail corridors in places like Whitestown, Greenfield, and Lebanon offer excellent value for forward-thinking investors.
3. Lease Structure and Terms
Retail investors should prioritize strong lease structures that reduce landlord responsibility and increase stability. In 2025, most investors prefer:
- Triple Net (NNN) or Absolute Net Leases
- Longer lease terms (7+ years) with built-in rent escalations
- Options to renew that support long-term value
- Personal guarantees or credit-backed tenants
It’s critical to review CAM (Common Area Maintenance) charges and make sure they’re clearly defined and tenant-funded.
4. E-commerce Resilience and Omnichannel Synergy
Retail is no longer just brick-and-mortar—it’s a hub for digital fulfillment, local pickup, and experience delivery. Look for properties with tenants who:
- Offer BOPIS (Buy Online, Pick Up In Store)
- Leverage physical locations as brand anchors
- Integrate tech into customer experience
- Have loyal, regional customer bases
In Indiana, this includes pharmacies, pet supply stores, fitness chains, and QSRs offering app-based ordering and mobile pickup lanes.
5. Strong Cap Rate Relative to Risk
As interest rates fluctuate, it’s important to evaluate cap rate in context. Ask:
- Is the cap rate appropriate for the tenant’s risk profile?
- How does it compare to local market averages?
- What are the re-leasing risks if the tenant vacates?
- Are there upcoming lease expirations that impact NOI?
Indiana’s suburban retail markets currently offer attractive returns in the 6.0%–7.5% range, particularly for multi-tenant strip centers and single-tenant NNNs with strong rent history.
6. Value-Add or Redevelopment Potential
In 2025, the best returns aren’t always found in turnkey assets. Investors should watch for:
- Underutilized centers in fast-growing areas
- Properties with below-market rents or expiring leases
- Sites with zoning flexibility or pad redevelopment potential
- Opportunities to add drive-thrus, outdoor seating, or EV charging
With shifting consumer preferences, some older centers are ideal candidates for strategic repositioning.
Final Thoughts
Retail real estate isn’t dead—it’s evolving. In 2025, the winners are assets that serve community needs, adapt to digital life, and offer stability for the long haul. The key is knowing what to look for—and where to invest.
At Annie Scott Realty Group LLC, I help investors evaluate every layer of a retail opportunity—from lease terms to local demand—so they can make decisions that build true, lasting value.
Let’s talk about the retail properties you should be watching now—and how to position yourself for smart growth this year.
Photo Credit: Luxury Presence
Sources:
- CoStar Retail Market Reports (Indiana 2025 Q1)
- National Retail Federation – Future of Retail Study
- CREXi Retail Investment Trends 2025
- Urban Land Institute – Retail Forecasts & Trends
