Retail industry research points to a national retail environment where new store openings are on pace to outrun closings for the first time since before the pandemic, according to analyst estimates from firms including Coresight Research and Telsey Advisory Group. That is a meaningful reversal from the wave of bankruptcies and closures that defined the retail conversation as recently as last year, and Metro Detroit is seeing the same dynamic play out locally.
Who Is Actually Signing Leases
The tenants absorbing vacant big-box and anchor space today look different from the tenants that vacated it. Medical and urgent care operators are taking large-format space for the visibility, parking, and signage that a traditional office park cannot offer. Fitness and wellness operators, from larger gym concepts to boutique studios, are drawn to the same large floor plates that used to house department stores. Value and discount retailers are expanding into space vacated by struggling mid-tier chains. And a range of service-based tenants, from entertainment concepts to specialty grocers, are rounding out the mix.
Industry researchers have coined the term “medtail” for the medical and wellness segment of this trend specifically, reflecting how significant a share of current retail absorption is coming from healthcare-adjacent tenants rather than traditional retail categories. That is a structural shift in retail demand, not a temporary blip.
“Five years ago, if you told a retail owner their next tenant for a vacant anchor space would be an urgent care clinic and a fitness studio splitting the box in half, they would have assumed the property was in trouble. Now that is often the best outcome available, and it is a good one.” — Friedman Real Estate
Subdividing Is Increasingly the Right Move
One of the clearest shifts in strategy among successful retail owners is a willingness to subdivide large anchor spaces into two, three, or more smaller units rather than holding out for a single replacement tenant of similar size. This requires real upfront capital investment: new demising walls, separate utilities, and often separate storefronts and signage. But with quality retail space scarce and demand outpacing available supply in many categories, the economics increasingly favor doing that work rather than waiting.
Owners who have made that investment are generally backfilling space faster and at better blended rents than owners holding out for a single large tenant. The tenant mix that results, often combining a medical or fitness user with a smaller specialty retailer, also tends to be more resilient than a single big-box tenant, since it is not dependent on the fortunes of one company or one retail category.
What This Means If You Own Retail Property
If you own a shopping center or standalone retail property with a vacant anchor space, the practical question is no longer just “who will take this space as-is.” It is whether subdividing the space, and marketing to medical, fitness, value, and service tenants directly, would get the property leased faster and on better terms than continuing to market it as-is to traditional retail categories. That analysis depends on the specific building, market, and capital available, but it is worth running the numbers before defaulting to the traditional approach.
How Friedman Can Help
Friedman Real Estate leases and manages retail properties across Metro Detroit and the broader Midwest, and we are actively working with owners on exactly this kind of repositioning. If you have a vacant anchor space and want a read on what tenant mix and configuration would actually get it leased in today’s market, we are happy to walk the property with you.
Reach out at friedmanrealestate.com.
