Navigating Retail Challenges:

Retail is going through another sorting process—and this one has very little to do with whether a store is “busy” or looks successful on the surface.

In this newsletter, I break down what’s really driving many of the store closures and restructurings we’re seeing right now—and why credit quality and lease structure are at the center of it.

Here’s the reality:
Retailers today are operating under two major pressures at the same time:

That combination is forcing brands to make fast, sometimes aggressive decisions—often at the portfolio level, not the store level. In many cases, stores are being closed even when they’re performing “fine.”

This is where credit quality comes in.
Retailers with strong unit economics, disciplined balance sheets, and operational efficiency still have options. Those without them don’t. Credit quality has become a key separator between brands that can adapt and those that are forced to react.

And real estate is usually where the impact shows up first.
For landlords and retail property owners, this environment makes tenant credit, lease structure, and downside protection more important than headline rent or occupancy alone. A “full” center isn’t always a healthy one.

The retail market is still working through this reset—but the direction is clear.
Credit quality, flexibility, and operational discipline are becoming non-negotiable.

If you own retail real estate—or are thinking about your next leasing or investment decision—this is a conversation worth paying attention to.

📌 Subscribe for ongoing insights on retail, the economy, and how these shifts affect real estate owners in real time.

According to QSR Magazine’s 2025 Drive-Thru Report, the drive-thru remains the backbone of the QSR business—but performance gaps are widening. While average service times improved slightly year over year, accuracy and order consistency continue to lag, especially during peak periods.

The key takeaway isn’t just speed—it’s reliability. Brands that invested in better lane design, order confirmation tech, and staffing workflows consistently outperformed peers. Meanwhile, operators trying to “stretch” outdated prototypes or under-invested sites struggled to keep up.

Why this matters for retail real estate:
Drive-thru demand isn’t slowing, but tenants are becoming far more selective. Site layout, stacking depth, ingress/egress, and the ability to retrofit for dual lanes or digital ordering now directly impact a location’s long-term viability. Not every pad—or older center—can support what modern QSR operators actually need.

For landlords, the message is clear: drive-thru is no longer just an amenity—it’s an operational requirement. Properties that can’t evolve risk falling out of the active tenant universe, even if they’re “fully leased” today.

Ray Kang CCIM, a Texas commercial real estate broker, provides essential updates on the current economy and retail news, guiding retail center owners and investors in their real estate investing decisions. This video helps you understand market trends and make informed choices for better returns, emphasizing the importance of cash flow. Stay ahead with the latest finance news impacting commercial real estate investing.

Check out my latest Retail Weekend Wrap Up | Week of December 27, 2025 on Youtube.

Stay informed with my newsletter: https://stripcenteriq.com/

Set up a time to talk: https://www.raycrebroker.com

I SELL RETAIL CENTERS WITH RESOLUT RE https://www.resolutre.com

Vanguard just projected public markets may return only 5% annually over the next decade. In a 2024 report, Goldman Sachs forecasted the S&P 500 may return just 3% annually for the same time frame—stats that put current valuations in the 7th percentile of history.

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📊 Economic Context Powered by Share Scoops Some of the economic insights discussed in this video come from Share Scoops, a daily macro and markets newsletter I read regularly. They’ve provided a discounted sign-up link, personalized for my audience. 👉 Learn more here: https://www.sharescoops.com/upgrade?offer_id=160d0567-ec1a-46ad-a4b7-7014c5a14380

Until next week, take care. -Ray