Market Shifts, Investor Energy, and the Growing Allure of Strip Centers

This year’s ICSC Carolinas event reaffirmed the region’s status as a national hotspot for retail real estate investment, particularly strip centers. The conversations were clear: despite ongoing macroeconomic uncertainty, the Carolinas continue to offer compelling fundamentals that are drawing buyers, developers, and capital from across the county. As Ashleigh Liguori noted, “ICSC Carolinas never disappoints, especially with my focus on Carolina centers. The surge in unanchored retail is undeniable, with fresh faces joining the space every year.”

Strip Centers: The Real Estate Equivalent of a Trending Hashtag

Strip centers continue to be in the spotlight. High occupancy, resilient foot traffic, and the draw of necessity-based retail continue to make this format especially attractive. Investors and brokers alike cited a growing emphasis on adaptability, from tenant mix to design, with a notable uptick in experiential and service-oriented concepts joining traditional retail.

Urban grocery-anchored centers in North Carolina are reporting 95%+ occupancy, while South Carolina’s coastal centers benefit from population inflows and tourism-driven demand. Across both states, average occupancy is hovering around 92%, a testament to ongoing consumer demand and tenant interest.

Strong Fund Appetite and Institutional Focus

Liguori highlighted that “Of the strip centers that have closed in South Carolina this year, 30% were acquired by fund buyers. Of those we met with, most had several under contract (2-6) but aggressively on the prowl for more.”

Institutional investors are doubling down on well-located, necessity-based centers, particularly in suburban nodes seeing the greatest demographic expansion. Private equity and fund managers are actively targeting assets with stable cash flows and room for rental upside, reinforcing the view that strip centers are now core real estate plays.

Adapting to the New Normal of Interest Rates

While the rate environment continues to challenge dealmaking, buyers are recalibrating expectations and pushing forward. “Interest rates have been the talk of the town for what feels like forever,” Liguori said, “but buyers are adapting to the new normal and actively pursuing deals to make it happen. There is also a very large amount of cash in the market that is looking to take deals down.”

Indeed, while cap rates have widened 25-50 basis points over the past year, deal flow continues, driven by strong equity positions and a willingness among lenders and borrowers to structure around the rate environment through buydowns and creative financing.

Debt Maturities and the Looming Supply Shift

The industry is watching closely as nearly $2 trillion in commercial real estate debt comes due nationally in 2026 and 2027. In the Carolinas, this has led to strategic decision-making among owners, some opting to sell rather than refinance into significantly higher rates.

Liguori emphasized, “owners facing rate increased to the 6s compared to where they’re sitting in the 3s are strategically evaluating their assets for a refinance or sale. With this, we expect to see a handful of new deals start rolling out to market.”

This maturity wave will lead to a gradual increase in inventory over the coming months, presenting acquisition opportunities for capital investors, and potentially increased competition for sellers.

Window of Opportunity for Sellers

Despite strong buyer appetite, inventory remains tight. According to Liguori, “this presents a window of opportunity for sellers to capitalize on high occupancy rates before an anticipated influx of competing properties enter the market.”

The Carolinas remain a magnet for national capital. “Driven by population growth, buyers are capitalizing on immediate upside on rent growth and long-term value creation,” Liguori shared.

Charlotte, Raleigh, Greenville, and Charleston are seeing some of the fastest population growth in the country. Suburban migration, job creation, and quality-of-life factors continue to pull both residents and retailers into these markets, reinforcing demand for accessible, neighborhood-serving retail.

Strategic Moves in a Shifting Market

Between high occupancy, strong fundamentals, and deep investor interest, the Carolinas strip center market is riding a wave of momentum, even as interest rate headwinds and looming debt maturities reshape the playing field. As Liguori put it best, “strip centers are the real estate equivalent of a trending hashtag.” In today’s market, the smartest players aren’t just watching the trend, they’re capitalizing on it.