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I'm writing this one from home after three days at ICSC Las Vegas, and I want to tell you what I saw on the floor — and then what was happening in the background while most at the conference weren’t watching.

Let's get into it.

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The mood was the most bullish I've heard in three years. Capital is strong. Retail is still pushing forward. "Great year" came up over and over again in conversations with leasing teams and private landlords alike.

But every confident statement came with a quiet caveat. Leasing momentum is real — but NOI hasn't caught up yet. Brokers were upbeat about deal volume and asking-rent traction. The same brokers, when the topic shifted to underwriting, talked about higher concession packages, longer free-rent periods, and tenant build-out costs eating into headline lease numbers.

Tenant remix was the working obsession. Almost every landlord conversation came back to the same question — what categories belong in our centers now, and which ones are quietly becoming risk? The answers were converging:

The Texas conversations were active. San Antonio, Austin, DFW, Houston and even the Rio Grande Valley kept coming up alongside Phoenix, Nashville, and the Carolinas as the places private and institutional capital wants to deploy — once they get comfortable with the cost of capital.

Inflation was the side conversation that wouldn't go away. Operators talking about insurance costs, CAM reconciliation pushback, tenants negotiating harder on pass-throughs, and the consumer doing more frequent trips at smaller baskets.

Entertainment retail was the surprise sleeper — trampoline parks, food halls, family entertainment, fitness. Anchored centers with the right physical bones are getting underwritten differently than they were 18 months ago.

And AI — every other panel, every other booth, every other answer. CCIM leadership called it the Friendster era before MySpace. That's about right.

That was the mood on the floor. Here's the part nobody was watching closely.

While ICSC was opening on Monday, the bond market was repricing the cost of capital.

Source: Federal Reserve H.15 | CNBC, May 18, 2026

The bigger shift: futures are now pricing roughly a 40% probability of a 25 basis point rate HIKE in December — not a cut. Six months ago, consensus expected the Fed to cut three or four times in 2026. The market is now telling us the next move could go the other way.

Treasury Secretary Bessent spent the week at the G7 in Paris fielding questions from European central bankers about U.S. debt sustainability and inflation. ECB President Lagarde, when asked about bond market volatility, said only: "I always worry, that's my job."

The long bond stayed elevated through the week. That's the part that matters for our audience.

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Plain language: the 30-year Treasury isn't directly your loan base rate. Most strip center acquisition financing prices off the 10-year plus a lender spread. The 30-year sits over to the side.

But the 30-year isn't irrelevant. It's the signal about term premium — the extra yield investors demand to hold long-duration paper instead of rolling shorter bonds. When the 30-year sits at 5%+, bond investors are saying they're worried about three things at once:

That shows up in CRE two ways over the next 6–12 months:

1. It puts a floor under long-hold capital's required returns. Insurance companies, pension funds, and large institutions allocate against the long bond. When the long bond stays elevated, their required yield on long-duration real estate stays elevated. That bleeds into how institutional buyers underwrite — and ultimately into pricing for trophy strip centers being bid by REITs and institutional capital.

2. It shapes lender behavior on refinances. CMBS lenders, life companies, and bank balance sheet lenders all watch the long end of the curve when they think about credit risk in a higher-for-longer scenario. They tighten DSCR requirements, demand stronger sponsors, and price more conservatively on assets with near-term lease expirations. We've seen this play out on several refinances in our market over the past six weeks.

Owner reality check: If you have debt maturing in 2026 or 2027, the rate math is harder than it was 30 days ago. A deal that pencils at 6.75% all-in doesn't pencil at 7.25%. Run the numbers now, not later.

The floor was bullish on leasing. The pump told a different story.

AAA put the national average for regular at $4.55 on May 22 — a four-year Memorial Day high, $1.38 above where it sat at the same point last year. Texas came in at $4.09 — fifth-cheapest state in the country, but still up roughly $1.30 from where it started the year. Six states above $5; California crossed $6.

Source: AAA, May 21, 2026

And the competition for that consumer's trip got more serious this week.

Amazon went live on May 12 with Amazon Now — 30-minute grocery and household-essentials delivery. The service is widely available in Dallas–Fort Worth, with active rollout in Austin and Houston. Prime members pay $3.99 per order.

Source: CNBC, May 15, 2026

For grocery-anchored strip center owners, this isn't an existential threat — most grocery trips still happen in person, especially the weekly stock-up. But Amazon Now goes straight at the fill-in trip — the quart of milk, the missing onion, the last-minute essential. That's the trip that drives ancillary visits to the nail salon, the dry cleaner, the coffee shop, and the QSR pad at your center.

Lose enough fill-in trips and you lose meaningful sales for the inline tenants who underwrite their leases off foot traffic, not basket size.

Census Bureau released Q1 2026 e-commerce data on Monday: $326.7 billion for the quarter, up 2.7% sequentially.(Census, May 18, 2026) The line keeps grinding higher.

1. The leasing strength is real, and so is the bond market's reset. Both are true. The industry just spent three days celebrating the strongest leasing environment in a decade, while the long bond hit a one-year high in the same building. Don't pick one signal and ignore the other. Lean into the leasing tailwind on operations. Underwrite the cost-of-capital headwind on any refinance or disposition decision.

2. Tenant remix is no longer optional. The categories getting underwritten with confidence are pulling further away from the categories that aren't. If your center has more than 20% of its rent roll in tenants whose value proposition can't survive a $4.55 gallon and an Amazon Now delivery in 30 minutes, that's the conversation to have this quarter. Not next year. This quarter.

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