The unanchored strip center sector has entered a new era! One that is not only defined by early adopters or contrarian thinkers, but by institutional validation, operational sophistication, and sustained performance across nearly every major U.S. market. What began years ago as a fragmented category dominated by private owners has now become a distinct property type with its own ecosystem of REITs, fund managers, operators, and capital partners.

 

To explore this next chapter, Matthews™ hosted its second annual strip center roundtable, moderated by Jeff Enck, First Vice President of Shopping Centers at Matthews™. Joined by Kyle Stonis, Pierce Mayson, and Boris Shilkrot, Enck convened 13 of the largest owners and operators to carry on discussions from where last year’s event left off.

 

In 2024, the industry debated whether unanchored strip centers truly warranted the attention they received. In 2025, the niche has matured and interest in the unanchored strip center space has only grown. Institutions are deploying capital, operators are expanding footprints, and retail tenants in unanchored strips are performing well despite an environment still shaped by shifting consumer behaviors and challenges with capital markets.

 

The Thesis Revisited: Has the Space Been Validated?

The discussion opened with a familiar question: Is the thesis behind unanchored retail still holding? Can a shopping center without an anchor remain competitive? The confidence was unmistakable.

 

John Cattonar of Curbline, now the first publicly traded REIT dedicated exclusively to unanchored strip center retail, offered the clearest affirmation. “We wanted to create a pure-play REIT that had first-mover advantage,” he said, recalling Curbline’s October 2024 debut. “In the last twelve months, we’ve bought almost a hundred shopping centers for just under $900 million. We’re operating these centers for less than 10% NOI (compared to 20%-25% for power centers), we have less than 1x debt-to-EBITDA, and we have $800 million of liquidity. So, when you ask if the thesis has been validated–yes, at least at Curbline.”

 

Cattonar’s remarks set the tone for the panel: what was once an emerging thesis has now become an established one—validated by performance, capital markets, and now the public market. Several operators noted that tenant demand, occupancy, and leasing velocity have reached levels that would have been unthinkable during the “retail apocalypse” era a few years ago.

 

Kristen Neyland from Crow Holdings echoed this sentiment, pointing to their recent recapitalization. “We completed a major recapitalization of our portfolio—almost 200 assets totaling 4.5 million square feet. Our NOI is growing, leasing and operating metrics are strong, and we drew interest from global investors. It absolutely reinforces what we’ve been building for ten years and speaks to the power of scale and investor interest in this product type.”

 

 

This asset class is legitimate, scalable, and overall is an institutional-worthy strategy. “These deals, Curbline going public and Crow’s recap in ‘23, have helped provide that institutional attention [to the space],” said Dusty Batsell of Baceline Group. “This has brought a lot of validation, but we still feel like there’s a lot more opportunity moving forward.”

 

Others pointed to operational complexity as the driver of long-term advantage. “The reason we started buying strips at the time was the price point, it was below what a REIT would buy but above what a wealthy investor would buy,” said Derek Waltchack of Shannon Waltchack. They developed a core competency of managing these centers and learned early on that managing strips is not for the faint of heart. “You’ve got credit tenants, but you also have mom-and-pops.  You have to build a management competency. And now, as institutions step in, they’re learning what we learned twenty years ago.”

 

Is Raising Capital Easier Today?

The next question turned to capital raising: has the broader embrace of essential-service strip centers made fundraising easier? For many, the difference was dramatic.

 

“Yes,” said CenterSquare’s Robert Holuba. “When we started ten years ago, had I known how hard it was going to be to raise capital for retail, I probably would’ve never embarked upon the journey. But today, I had breakfast with some multifamily developers who told me how difficult their fundraising environment is with performance challenges and fundamentals. Meanwhile, we’re out raising programmatic joint ventures with public pension funds.”

 

Holuba described the firm’s trajectory in three places.

• Early on, in 2016 and 2017, it was like a hypothesis…capitalizing on the negative sentiment of retail.
• 2.0 was coming out of COVID, it became an aggregation strategy with smaller dollar amount
• Now phase 3.0, it’s a bigger, more prestigious, iteration of buying with institutional capital.

 

It’s evident that this shift didn’t happen by accident. It happened because performance forced recognition. And, one of the most unconventional fundraising stories comes from Don Tepman, also known as “The Strip Mall Guy.” His social media presence has evolved into a surprisingly potent capital channel. “Our average check size from a social media lead is north of half a million dollars,” he said. “That’s an investor who is sophisticated…But they have built familiarity with me, just by following me day-to-day [on social media]. It definitely opens up doors that otherwise wouldn’t be open.” However, he points out that social media doesn’t replace track record. It only complements it. “What keeps me up at night is not fundraising, it’s finding that next deal.”

 

Other panelists go on to explain that today, the fundraising pitch has changed. You don’t need to convince people to invest in the asset class anymore (which used to be 80% of the pitch). “There are new investor types that we’re seeing, but the ability to show what we have produced and how assets are performing goes a long way [speaking louder than any pitch],” said Anthony Fanizio from Last Mile.

 

The conversation then expanded to discuss how investor profiles have changed. Some groups are now fielding interest from institutional LPs who see strip centers as a stable, income-focused counterweight to more volatile asset classes. Others find that demonstrating strong performance in earlier funds has unlocked access to larger and more diverse capital pools.

 

For some, such as Bond Street REIT and KM Realty, capital raising is increasingly tied to innovative structures such as the 721 UPREIT. These allow private owners to contribute assets into a REIT vehicle in exchange for operating partnership units. This is a powerful strategy in a fragmented sector full of long-time owners who want tax deferral but also want to stop operating their own centers.

 

“Our growth has been through the high-net-worth individuals, we’ve rejected institutional equity so far,” said Randy Keith of KM Realty. “An UPREIT is a great exit strategy for individuals who own 1 to 20 shopping centers, whereby they can defer taxes and exchange into a REIT.” He explains that they aren’t easy, but they solve a real problem for private owners. If they want to grow the right way, UPREITs will become a major part of that strategy.

 

The Changing Capital Markets Landscape

The debt markets played a significant role in the conversation, particularly as interest rates have begun to soften. After two years of elevated borrowing costs and limited lender appetite, many panelists said they were pleasantly surprised by recent debt executions.

 

“Banks have really stepped up in a number of ways on everything from spreads, structure and flexibility,” said John F. Morgan, Jr of SouthCoast Centers. With bank debt you can operate with more agility and right now they’re competing. Randy Keith added that they have started dealing more with banks, which has helped with spreads, but there’s certainly more competition than the more regional banks.

 

North Pond Partners’ Taylor Brown noted that rates have influenced underwriting but have not fundamentally altered their acquisition philosophy. “Our vehicle’s an open-ended fund, so we’re not focused on IRR the way some are,” he said. “But yes, we’re modeling lower interest rates”

 

The group was divided on what falling rates might mean for inventory. Some expect more selling from private owners who no longer feel trapped by ultra-low existing debt. Others believe that vacancy, not rates, is the real catalyst.

 

“I think vacancy drives volume more than the rate story,” Don Tepman said. “When a mom-and-pop owner has a sudden vacancy, fear sets in. They don’t know how to backfill and that’s when they sell.”

 

Several panelists predicted an uptick in modest vacancy as certain consumer categories soften—particularly lower-income households facing inflation pressure. “We’re already seeing some tenants close earlier than expected,” said one participant. “We’ve had a few businesses shut in mid-term because their economics just shifted. So yes, vacancy may creep up. But for strong operators, that’s an opportunity.”

 

Unlocking Inventory in a Tight Market

Enck asked the panel: is the lack of product the number one challenge in the space today?

 

Bond Street REIT’s Luke Fox, “For us, yes lack of product has been a challenge, but we’re still finding opportunity in the market.” He also notes that private owners who have held properties for decades who are still on the fence about selling, that educating them on pricing and process can be slow. “There’s product out there but it’s figuring out where there’s inherent value from what is being spun out.”

 

Some argued that compressed cap rates and strong fundamentals still entice sellers—just not in significant volume. Others believe that as rates normalize and certain centers experience modest vacancy, the logjam may break. But the group agreed that product scarcity underscores a larger reality: operators must be proactive, patient, and prepared to execute quickly. As Cattonar referenced, they’ve built a team at Curbline that can gather data and make decisions in a few hours because that’s what competing for product requires today.

 

Leasing and Mark-to-Market: The Heart of Value Proposition

One of the strongest themes emerging from the conversation was leasing. Nearly every operator reported exceptional occupancy levels and strong spreads.

 

“We’re at 97% occupancy,” Cattonar said. “Our renewals have been 20% on a straight line basis, and new leases have been a 40% spread.” This doesn’t happen unless demand is deep and broad. Neyland shared similar results. “Right now we are at 94%-95% leased, and just this year we have already renewed 85% of our tenants. This tells us that there’s very strong demand and not a lot of available space. And that’s naturally going to put upward pressure on rents.”

 

Yet, panelists emphasized that not all categories are equal. Boutique fitness, though popular, often hits a ceiling due to class-size constraints. Certain emerging fast-casual concepts, especially those backed by private equity, may expand too quickly and collapse under their own weight. “When you see the same bowl concepts and chicken concepts chasing ‘best space at highest rent,’ you worry,” said one panelist. “Some will survive. Many won’t.”

 

Danizio added that sustainability depends on understanding each tenant’s economics. “Can a tenant really go from $25 per square foot to $35 per square foot? For some uses, absolutely. For others, it’s just not viable.” The mark-to-market opportunity remains compelling, but only for operators willing to study each tenant individually, not rely on market averages.

 

Adam Greenbaum from AGW Partners shares that a majority of the properties they’ve bought have been from owners who have owned the property for 10 to 20 years, sometimes as high as 50 years. “It’s interesting to study what these longstanding owners think about their tenants. We’ve noticed that with the non-credit tenants, rents tend to be very low, remaining term short, and the landlord participates in no inducement costs.” Especially in markets like New York, rents can be upwards of five to ten times higher, but evictions take 18 to 24 months. He said that “having deep, meaningful relationships with tenants and staying connected throughout the lease term, helps with making the centers have more overall activity.”

 

Enck transitioned the discussion to outparcel strips, which often command the highest rents in the market. But are these rents sustainable?

 

Holuba described a recent portfolio of two-tenant outparcels with Starbucks endcaps—an anomaly rather than a strategic direction. “These assets usually trade to 1031 buyers at low cap rates,” he said. “It’s hard to compete for them consistently.”

 

Riverwood’s founder, Ron Chanin, spoke from a developer’s perspective. “Currently it’s extremely difficult to develop,” he said. Land costs, construction costs, capital markets are all pushing rents to levels that may not be sustainable long term. “The last major development we completed would not pencil today.”

 

Others argued that the economics of drive-thrus and mobile ordering have changed the calculus. “Cava, Chipotle, Starbucks, they’re doing volumes now that would have been unheard of ten years ago,” one panelist noted. “Underwriting must evolve.”

Still there was broad agreement that retail located “on the road” that’s visible, accessible, and convenient, performs better than shadow-anchored space set back behind a large box.

 

“Conventional wisdom was that the value of your shops, wherever it was in the shopping center, was based on the performance of the anchor behind it. And what we did during COVID was analyze cell phone data,” said John Morgan Jr. “What we learned was that less than 10% of traffic to an outparcel tenant goes into the anchor behind it.”

 

He also pointed out that retention has been very high, even where maybe they thought internally the rents were a little higher than what the market was when the tenant came to take an option or renewal.

 

Geography & Growth Strategy: Where to Look?

The panel turned to geography. Tepman shared the most flexible view. “I look at where there are good deals. It’s not about the market, it’s about deals.” He made the point that if the fundamentals are there, he’s interested, whether it’s Indiana or California.

 

Batsell took a different approach. “I would say we are pretty specific in terms of our geography, but it has a lot to do with operations.” Baceline Group looks more for Solid B centers, which require a lot of hands-on management. “We reorganized our operations to make sure that we are within a two- to three-hour drive of every property with boots on the ground so that we could provide a hands-on touch.”

 

Shannon Waltchack continues expanding methodically into new regions, while AGW Partners has pursued a strategy shaped by tenant relationships, especially in markets like Atlanta where they see meaningful value-add potential.

 

Riverwood, with decades of experience, remains highly selective and development minded. “We’ve had many offers to buy portions of our portfolio,” said Chanin, “but replacing these assets with something of equal quality is almost impossible.”

 

Operations: The Hardest Part, But Biggest Advantages

The group agreed that strip centers demand a level of operational intensity. Matthews™’ own Kyle Stonis added a dose of realism about the growing institutional interest in unanchored strip centers. “There are a lot of groups trying to get into the space,” he said. “But as Ron and others have pointed out, the operations of an unanchored strip are massive. The amount of management, leasing, and capital you have to deploy is tough for institutional groups to execute right now.”

 

Stonis noted that many institutions initially believed they could build in-house operating capacity, but the reality has tempered their ambitions. “We’ve met with the biggest institutional groups over the last couple of years,” he said. “They would come in saying, ‘We want to buy unanchored strips and manage them ourselves.’ But fast forward twelve months—and that program isn’t going to work for them. So now we’re seeing LP capital sneaking in. They’re partnering with the operators who’ve already figured it out.”

 

Crow Holdings maintained a lean but deep in-house bench and outsources property management and leasing to local partners. “It’s important to us to have dedicated local boots on the group expertise,” said Neylan. “With 2,000 tenants, you need partners who understand every nuance of the submarket.”

Southcoast Centers has brought nearly operations in-house, outside of leasing. “It has a lot of benefits to be able to control the whole process and have standards and our systems communicate,” said Morgan. “You either have to outsource it and be committed to that, or be committed to doing it yourselves.”

 

Others discussed the limits of traditional leasing models. For small-bay space, commissions are often too small to justify proactive outreach from third-party brokers. The group unanimously agreed: operational intensity creates competitive advantage. Scale only works when operations do. Others emphasized that scaling is about processes, not just people. Without systems, data, discipline, and repeatability, growth becomes dangerous rather than profitable.

 

Luke Fox Bond Street highlights the importance of staying ready. “Opportunities appear quickly,” he said. “We prioritize the fundamentals of our thesis and remain prepared to act. That’s how you scale in an environment where product is scarce.”

 

Dispositions: Sell, Recap, or Hold?

The final business-oriented discussion addressed disposition strategies. CenterSquare plans to sell select assets annually. “Real estate needs to return capital to investors,” Holuba said. “Commercial real estate has seen a tremendous slowdown on return of capital back to investors, and it’s caused problems.  Selling even five to ten assets a year helps maintain liquidity and keeps our platforms healthy.”

 

Others, like Riverwood, see little reason to sell when high-quality assets are irreplaceable. “The problem is you’re going to exchange out and end up with assets that are not nearly as good as what you’re selling.”

 

This divergence reflects the broader variety of strategies in the room—income-focused, value-add, open-ended core-plus, REIT-style aggregation, and long-term hold.

 

Looking Ahead: Where is the Strip-Center Sector in Five Years?

The conversation closed with predictions.

Cattonar offered an unequivocal view. “At the asset level not much changes. As long as you buy great real estate that has leasable units, it will continue to perform.” But he noted that institutional ownership will increase dramatically.

 

The headlines this room has created have shined a spotlight on this sector. Institutions that once ignored strip centers are now being asked, ‘what’s your strategy to get into unanchored retail?’ That demand will reshape valuations.

 

Others pointed to the resilience of tenant demand. As one panelist noted, “in the sectors we all operate in (Salons, medical, QSR, daily needs…) there’s always a new entrepreneur ready to take space. That’s the beauty of this business.”

 

Some warned of risks, including oversaturation of certain categories, private-equity-driven expansion of unproven brands, and potential macroeconomic pressures on lower-income consumers. But the overall sentiment was clear: the long-term outlook remains strong.

 

The panel briefly touched on artificial intelligence. Some operators have begun using AI for property management tasks, data analysis, or marketing—but with caution.

 

Conclusion

This year’s roundtable revealed an industry that has grown more confident, more sophisticated, and more institutional in its approach. The sector is no longer fighting for recognition; it is shaping its own landscape. Unanchored strip centers have proven themselves as durable, efficient, high-performing assets with a long runway of opportunity ahead.

 

As capital flows deepen, operations become more advanced, and platforms refine their growth strategies, the next era of the strip center market will be defined not by contrarian bets, but by professional excellence, disciplined execution, and an increasingly institutional backbone.

 

If 2024 was about validating the thesis, 2025 was about scaling it. The sector’s next era will be shaped by disciplined operators, deeper capital pools, and the institutional infrastructure now forming around unanchored retail. The panel’s message was consistent: The runway is still long.