Retail REITs highlighted a sustained supply crunch for commercial properties during the Barclays 24th Annual Global Financial Services Conference on September 14, 2026, noting that leasing spreads remain in double digits and new development faces steep economic headwinds.
The panel featured Michael Bilerman, executive vice president, CFO and CIO of Tanger Inc. (SKT); Ross Cooper, president and chief investment officer of Kimco Realty Corporation; and John Caulfield, CFO of Phillips Edison & Company (PECO), moderated by Barclays REIT team member Rich Hightower.
Supply of retail stock now runs at just 20 to 30 basis points annually, far below the approximately 1.5% rate seen before the 2008 financial crisis, the REIT executives said. Kimco's Cooper noted that market rents would need to jump 50% to 65% to make new retail development economical given current construction and borrowing costs.
Cooper provided details on Kimco's portfolio, which carries an enterprise value of roughly $24 billion and spans 564 shopping centers totaling 100 million square feet across the top 20 major metropolitan statistical areas. About 87% of Kimco's assets are grocery-anchored or mixed-use. Small-shop occupancy hit an all-time high of 92.9%, while anchor occupancy sits about 110 basis points below its peak. Tenant retention stands above 90%, up from mid- to upper-70% historically. Foot traffic rose more than 3% year-over-year, and the credit watch list is at its lowest level in years. Kimco expects FFO growth exceeding 5% annually over three years and targets a credit rating between A- and A3. Institutional-quality assets trade at low-to-mid 5% cap rates, while implied cap rates sit around 7%; multifamily projects sold at 4.9% and 5.1%.
Tanger operates 38 outlet and open-air lifestyle centers encompassing 16 million square feet and roughly 3,000 stores. Bilerman stated the company has an equity market capitalization of about $4.5 billion, enterprise value of $6.5 billion to $7 billion, and annual free cash flow of $90 million to $100 million. Tanger pays a $1.25 per share dividend with a payout ratio of 60% to 66%, compared with an industry average near 75%. Debt-to-EBITDA leverage stands at 4.7x against a target range of 5x to 7x. Average store size is approximately 5,000 square feet, and tenant rents represent 9.7% of sales. Tanger has acquired eight new assets in recent years — two existing outlets and six other properties — with yields exceeding 8%.
Phillips Edison, which trades publicly for five years, manages 330 grocery-anchored centers across 31 states. Caulfield said 83% of its centers feature the number one or number two grocer in their market. Necessity-based goods and services account for 74% of rent, with grocery store rent making up about 30% of total. Debt-to-EBITDA leverage is approximately 5x, in line with a low-to-mid 5x target. The company targets 3% to 4% annual same-store NOI growth, mid- to high-single-digit FFO/EPS growth, and a 3% to 3.5% dividend yield supporting 9% to 10% total annual returns. PECO plans to buy $500 million to $600 million and sell $100 million to $200 million in assets annually, with acquisitions typically priced at $25 million to $35 million and a 9% unlevered return target. Development projects target 9% to 12% cash-on-cash returns, with roughly $120 million in retained capital available for reinvestment each year. Grocery tenant health ratios are about 2.4%, and in-line tenant health ratios sit around 10%.
Renewal leasing spreads have exceeded 20% for three to four consecutive years across the panel's discussion, underscoring the tight market dynamic for available retail space.
