Intelligent Investment
2025 Retail Rent Dynamics
High-Street & Live-Work-Play Retail Districts Continue to Outperform
May 7, 2025 5 Minute Read
Executive Summary
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High-street retail holds its value, but pricing growth is uneven across markets.
Rents remain elevated in urban corridors of top-tier markets like Los Angeles and Miami, supported by strong tourism and resilient demand. However, cities such as Chicago, Washington, D.C. and San Francisco are seeing higher availability and slower pricing growth, especially in office-adjacent locations. -
Retail performance varies widely across formats.
Even within the same market, rent growth and availability can diverge sharply between high-street, suburban and live-work-play (LWP) districts. Markets like Miami and San Francisco demonstrate that performance doesn’t depend just on location; it’s about the type of retail and how it aligns with shifting consumer behavior. -
Prime LWP districts outperform broader mixed-use areas.
Markets with dense populations, strong employment and active residential development continue to see the best performance in LWP retail districts as consumers seek more convenience and connectivity.
Urban High Streets Command Premium Rents Despite Higher Availability Rates
Urban high-street districts command significantly higher rents in all markets analyzed in this report due to experience- and tourism-fueled demand. Los Angeles commands the largest premium for high-street locations with average rents more than triple that of suburban locations. While high-street districts command the highest rents, many have higher availability rates than their suburban counterparts. Many high streets are in business districts that saw a significant decline in foot traffic after the pandemic due to work-from-home policies and a drop in tourism. While many workers have returned to the office and tourism is back to pre-pandemic levels, high-street availability rates have yet to match those of the suburbs.
Figure 1: Q4 2024 Retail Rent & Availability
Dense Suburban Retail Districts Lead for Long-Term Rent Growth
Dense suburban retail districts have matched and in many cases exceeded rent growth in traditional high-street districts over the past five years. Top retail markets like New York, Dallas, Miami and Boston have all seen more consistent suburban rent growth due to population shifts, steady demand for residential properties and the appeal of convenient, service-oriented retail space. As many consumers spend more time at home than in city centers, it should come as no surprise that suburban retail districts have seen increased foot traffic with retailers focusing on essential products and lifestyle services.
High-street rent growth, on the other hand, has moderated in several major urban cores. San Francisco and New York have seen minimal gains, with urban rents nearly flat over the past five years. This softening reflects ongoing shifts in downtown district fundamentals, including slower office market recovery, elevated availability and evolving consumer preferences. Suburban rents have continued to accelerate in markets like Denver and Chicago with built-in consumer bases and more flexible retail formats.
Los Angeles and Philadelphia stand out as exceptions to the broader suburban trend, with high-street retail rents growing at a steady pace over the past five years. In Los Angeles, the prime Rodeo Drive and Melrose Avenue corridors continue to attract luxury tenants, supporting sustained rent appreciation. Similarly, Philadelphia’s urban core has remained relatively resilient, with retailers drawn to more established districts.
Figure 2: Five-Year Historical Rent Growth
Retail Availability: Supply Shifts Reshape the Urban-Suburban Divide
Retail availability tends to be tighter in suburban than urban high-street markets. However, in some markets like Dallas and Denver, the opposite trend prevails with higher availability in dense suburban corridors.
In Dallas, suburban construction has surged along with population growth, adding a large amount of new supply. Among major U.S. markets, Dallas had the second highest amount of new deliveries last year, just behind Houston. And while demand remains healthy, this new supply has pushed the availability rate for prime suburban space above that of high-street space.
In Denver, softer demand has slowed the pace of leasing in suburban centers. Net absorption is now less than half of what it was in 2022 and nearly flat compared with 2019 levels. While high-street districts continue to draw many retailers targeting affluent urban consumers, suburban space demand has lost momentum as some tenants forgo expansion plans and optimize existing locations.
Figure 3: Dallas/Denver Availability Highlight
LWP Retail Districts Gain Momentum
Demand for space in LWP districts that blend residential, office and entertainment is showing steady growth, though performance varies by market. New York has the highest average LWP district rent at $91.40 per sq. ft., followed by Boston at $47.33 and Washington, D.C. at $46.21. These higher rents reflect strong demand for walkable, amenity-rich retail corridors where consumers spend most of their time.
In other markets like Chicago and Denver, rent growth in LWP districts is slower and availability has either increased or remained high. San Francisco, despite being a national leader in prime high-street rents, has relatively low asking rents in LWP districts, averaging just $27.80 per sq. ft. This suggests a wide range of asset types and performance levels within its mixed-use inventory.
Markets with dense populations, strong employment and active residential development continue to see the best performance in LWP retail districts. As consumers seek more convenience and connectivity, LWP districts that deliver a consistent experience with the right mix of tenants and higher foot traffic will be the most successful.
Figure 4: Live-Work-Play Availability vs. Rental Rates
What It Means
Overall retail rents across the U.S. remain resilient but growth rates differ by market and property type. High-street space continues to command a premium in top-tier cities, yet gains have slowed in urban cores with elevated availability. In contrast, dense suburban corridors are outperforming in many metros, with stronger long-term rent growth driven by steady demand and lifestyle convenience.
Mixed-use retail, particularly prime space in LWP districts, is also seeing pricing strength, with tighter supply and increasing tenant interest. The rent gap between prime and non-prime locations is widening, underscoring the importance of quality and walkability in rent performance.
As tenant strategies evolve, the focus on local demand drivers, rent resilience and how formats perform within their specific urban or suburban submarkets will be keys to success. Future occupier demand and, by extension, value, will depend on adaptability, asset quality and being in the right place with the right product.
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