Hey everyone — welcome back to your weekly retail and CRE intel briefing.

This week everything converged on a single question: is the rate environment getting better for retail property owners, or is it quietly getting worse? Let's get into it.

The University of Michigan dropped its final March reading this morning: 53.3. That's down from 56.6 in February and the lowest reading since December.

Here's what made this reading different from a normal dip. Surveys taken before February 28th were actually improving. Then the U.S.-Israel conflict with Iran started, and everything reversed sharply. The survey director noted the post-conflict surveys "completely erased" the earlier gains.

The part worth watching for your tenants: middle and higher-income consumers showed some of the steepest drops — not just lower-income households. When people with stock wealth and solid incomes start pulling back, the spending ripple hits across all retail categories.

Year-ahead inflation expectations jumped to 3.8% — the biggest monthly increase in about a year.

Source: University of Michigan Surveys of Consumers — Final March 2026 — released March 27, 2026

AAA reported the national average for regular gasoline is sitting at $3.98 a gallon — up roughly 33% in a single month. The Strait of Hormuz closure is the mechanism.

This matters beyond the pump. Diesel — which powers the delivery trucks that stock every tenant in your centers — is up over 36% since the conflict started.

There was supposed to be a tailwind this spring. Larger-than-usual tax refunds from last year's Working Families Tax Cut Act were expected to boost consumer spending. Oxford Economics estimated that at $3.60 average gas, those refunds would be almost exactly offset. We're past $3.60. The refund tailwind is gone.

The NRF's chief economist framed it simply: U.S. households spend about $50 a week on gas. Add $10–$15 to that and the first thing to get cut is restaurants, entertainment, and discretionary retail. That's the core of most neighborhood strip centers.

Source: AAA Gas Price Data / CNBC citing Oxford Economics and National Retail Federation — March 26–27, 2026

The National Retail Federation issued its 2026 forecast last week: retail sales up 4.4% to $5.6 trillion. That would be the strongest growth since 2022 and above the 10-year pre-pandemic average of 3.6%.

The foundation: wage growth, household balance sheets, and an unemployment rate still projected below 4.5%.

The honest read: the NRF explicitly said the Iran conflict was too uncertain to incorporate into their forecast. They built it before the $4 gas. The number is conditional, and they know it.

The structural split also matters: higher-income households are driving the majority of projected growth. The spending picture is bifurcated by income — and which side of that split your tenant mix is on has direct implications for your property's performance.

Source: National Retail Federation 2026 Retail Sales Forecast with Oxford Economics — March 18, 2026

One of the more important signals this week: dollar stores are attracting higher-income shoppers at an accelerating pace.

Grocery Dive reported this week that dollar store executives have been consistently calling out higher-income customer gains for several quarters. Dollar Tree's leadership specifically noted that the Iran conflict's gas price impact was likely to further accelerate traffic to value-focused formats. Their framing: "Dollar Tree is really that key tool that helps [consumers] manage their budgets."

Coresight Research has Dollar General, Aldi, and Tractor Supply leading all retailers in planned store openings for 2026. Value retail is expanding. Mall-dependent legacy formats are contracting.

For strip center owners: your value-oriented and essential-service tenants are positioned well in this environment.Mid-tier discretionary tenants are the ones worth watching closely.

Source: Grocery Dive — Wealthy Shoppers Heading to Dollar Stores — March 23, 2026

Now the part that connects directly to your property value.

The 10-year Treasury closed today at 4.44% — its highest level since July 2025. Four weeks ago, markets expected two Fed rate cuts in 2026. Today, markets are pricing in nearly a 50% chance of a rate hike by December. That is a complete reversal.

The driver: Iran conflict → oil up → inflation expectations up → Fed on hold or possibly tightening.

Why this matters to your strip center:

The 10-year Treasury matters to strip center owners because commercial real estate lenders price loans off it. When the 10-year moves, borrowing rates move with it — and the borrowing rate is what determines whether a deal works for a buyer.

Lenders on CRE deals typically price loans at a spread of 150 to 250 basis points above the 10-year, depending on the lender and deal profile. With the 10-year at 4.44% today, buyers in our markets are looking at loan rates in roughly the 6% to 7% range. That's the real cost of capital on a strip center acquisition right now.

Here's what that means in practice. A buyer underwriting your property is running debt coverage ratios and cash-on-cash returns. When their loan rate moves from 6% to 7%, the deal math changes — either the price has to come down or the deal doesn't close. That is the direct mechanism by which a rising 10-year becomes downward price pressure on your property. It's not abstract — it shows up in the bids you receive when you go to market.

Four weeks ago, buyers were underwriting with an expectation that rates were coming down. That expectation has been replaced by the possibility of a rate hike. That repricing doesn't happen overnight, but it accumulates.

When the rate refuses to fall — or moves higher — cap rates face upward pressure, which means property values face downward pressure. The offset is NOI growth. If your rents are growing and occupancy is strong, income growth can counterbalance that pressure. That's why tenant quality and lease execution matter so much right now.

The U.S. dollar index (DXY) also finished the week near 100 — up about 5% from its February low — driven by the same safe-haven dynamic. Another signal that the market is pricing prolonged uncertainty.

Source: Federal Reserve H.15 Selected Interest Rates / Advisor Perspectives Treasury Yield Snapshot — March 27, 2026 | Source: Trading Economics / Reuters — U.S. Dollar Index — March 27, 2026

1. Tenant mix review. Which tenants in your lineup are in growing, resilient categories? Which are in softening discretionary categories? This environment accelerates the separation between performing and at-risk tenants.

2. Lease renewal timing. NOI growth is your best defense against cap rate pressure on value. Renewing at market or above, and locking in term, matters more than usual when the rate environment isn't cooperating.

3. Disposition analysis. The window where the 10-year was drifting toward 3.5% and cap rate compression was a realistic tailwind? That window isn't open right now. If you've been thinking about a sale — this year or in the next few years — your analysis needs to account for where rates actually are.That's your Retail Weekend Wrap-Up for the week of March 2, 2026. Every source linked above is a primary government or trade authority source — no spin, no aggregators. Go read them yourself.