Across the U.S., small businesses are finding prime commercial real estate more accessible than ever—space that was once reserved for big chains is now within reach.
The national vacancy rate in shopping centers climbed to 5.8% in the second quarter of 2025, a trend partly fueled by chain stores abandoning leases. With demand softening, rental pressure is easing—but there’s a catch: half of all small businesses close within six years, making these opportunities a mixed bag for both tenants and landlords.
Malls Opening Doors for Local Entrepreneurs
Kimberly Blair, a San Diego-based grief counselor, noticed an increase in “screen fatigue” among her mostly virtual clients. She decided to open a storefront for in-person sessions, and found that shopping center space was plentiful.
“I was able to negotiate a fantastic monthly rent and a flexible lease term,” Blair said. “It benefits both my clients, who need in-person support, and my business by giving me a competitive edge.”
Across the country, health practitioners, yoga instructors, artists, and other small business owners are capitalizing on similar openings. Yet, experts caution that the availability and terms of these opportunities vary widely depending on location.
According to Cushman & Wakefield, the national shopping center vacancy rate rose by 20 basis points from Q1 and 50 basis points from a year ago. The firm’s report shows that while the pandemic caused even weaker numbers, the growing wave of store closures and rising tenant costs could further slow rent growth in the coming months.
Chains Close, Small Businesses Move In
“Main Street opportunities are definitely increasing for tenants beyond traditional retail,” said Elizabeth Lafontaine, director of research at Placer.ai. She notes that malls, especially in high-traffic areas, are becoming more welcoming to local businesses with a recognizable presence.
Teresha Aird, co-founder and CMO of Offices.net, agrees. “We’ve seen a noticeable uptick in small businesses moving into spaces that were previously out of reach due to pricing,” she said.
Service-based businesses, independent retailers, and fitness operators are taking advantage of these resets, particularly in inner-ring suburbs and mid-sized city centers.
Rental Rates Are Still Rising—but Slowly
While vacancies are increasing, rents are not falling dramatically. “Rental rates are still going up, just not as fast,” said James Bohnaker, senior economist at Cushman & Wakefield. Rates that were rising 4% post-COVID are now closer to 2%. This slower pace, combined with higher vacancies, opens the door for smaller businesses to move into spaces once too expensive.
Medical offices, spas, and other service-oriented businesses are increasingly taking advantage of this shift. Cushman & Wakefield expects the trend to continue as more national chains close, creating opportunities for small business tenants.
Transforming Vacant Spaces into Community Hubs
Andy LaPointe, owner of Traverse Bay Farms in northern Michigan, owns two retail outlets in local strip malls. “When national brands leave, it’s not just about filling a vacancy—it’s about creating an experience for the community,” he said.
His businesses benefit from existing foot traffic and infrastructure, but the real value comes from offering something unique and locally rooted.
Many small business owners are now negotiating more favorable lease terms, including shorter leases, partial fit-outs, and even rent-free periods in some cases. This flexibility allows them to test locations without overextending financially, while also supporting local economic regeneration.
Landlord Strategies and Market Realities
Marc Norman, associate dean at NYU’s Schack Institute of Real Estate, notes that landlords’ willingness to work with small businesses varies. Some cut prices to keep spaces active, while others may let vacancies accumulate if they plan to sell the property later.
“Many shopping centers are looking for ‘credit tenants’—chains that can pay six months’ rent upfront—but these are increasingly rare,” Norman said. If such tenants aren’t available, smaller businesses can negotiate favorable terms.
In markets like New York City, however, smaller businesses may face stiff competition, especially where demand for warehouse or industrial space is high. In other regions, smaller tenants can thrive if landlords offer manageable leases rather than costly triple-net arrangements.
Jacob Naig, a broker and property rehabber in Des Moines, Iowa, confirms this trend.
“A family-owned restaurant recently moved into a former chain pizzeria at nearly 30% below asking rent, with landlord allowances for kitchen improvements. Deals like this wouldn’t have been possible five years ago.”
The Risk Factor
Despite these openings, small business failure remains a concern. Glenn Brill, managing director at FTI Consulting, notes that over half of small businesses close within six years.
Landlords often weigh this risk carefully, favoring smaller strip malls over large empty big-box spaces and making sure local economic conditions justify reduced rental rates.
“Strip malls offer more realistic opportunities for small businesses,” Brill said. “But if the local economy is struggling, even lower rents may not be enough to entice new tenants.”
In short: As chain stores exit, malls and strip centers are giving small businesses a rare chance to secure prime real estate.
With the right strategy and flexible lease options, local entrepreneurs can turn these vacancies into vibrant, profitable spaces—though the risk of business failure means careful planning is essential.
Author Profile
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The writer is a real estate journalist specializing in all types of New York City properties, including luxury residences, commercial spaces, and homes.
He also writes humorous articles about real estate, investors, and realtors.
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