Sunny Days at Santana Row: Takeaways from FRT's Investor Day

Research evidence excerpt

Sunny Days at Santana Row: Takeaways from FRT's Investor Day

May 22, 2026

Highlights from FRT’s Investor Day

◼ FRT believes that they are on the cusp of a new “growth wave” following nearly a

decade of disruption stemming from the mid-2010s “retail apocalypse” and the

pandemic-related challenges of the early 2020s. With post-pandemic headwinds

in the rearview mirror and higher interest rates now mostly absorbed, management

remains constructive on high-quality, well-located open-air retail centers given the

favorable supply/demand backdrop. Elevated construction and land costs continue

to make new retail development difficult to pencil, limiting future supply growth.

◼ FRT shared several portfolio metrics that underscore the strength of its consumer

base, including 3.9mn average annual visits across its centers, 44-minute average

dwell times, 5% annual small shop sales growth and average small shop rents of

$49psf.

◼ Consistent with what we heard at ICSC this week (see our recap HERE),

management noted that despite concerns around inflation and higher gas prices,

consumer behavior and shopping patterns across FRT’s portfolio have remained

resilient with no meaningful slowdown in traffic or spending trends observed to

date.

◼ From a capital markets perspective, FRT described demand for retail real estate

as strong given the sector’s favorable fundamentals and still-positive leverage

although cap rates have tightened. While grocery-anchored retail remains highly

sought after by institutional investors, FRT believes its size, scale, and operating

expertise provide a competitive advantage in pursuing larger, more operationally

intensive assets where they can leverage leasing expertise, asset management

platform, and existing retailer relationships to drive outsized returns.