In an era of declining malls, distressed office towers, and relentless e-commerce disruption, one format has quietly outperformed expectations: the suburban town center.
The most successful town centers today combine retail, restaurants, office space, community events, and multifamily housing. Each use reinforces the others to create places people don’t just visit but choose to live in. These places are walkable, experience-driven, and built for longevity. They’ve evolved beyond lifestyle centers into resilient, high-performing residential engines.
This is Main Street 3.0 evolving before our eyes. Retail sparked activation, office introduced built-in daytime demand, and now multifamily is unlocking full asset value. No longer lifestyle experiments, these centers are mature ecosystems with track records and a clear runway for reinvestment.
Why town centers outperform
- Retail occupancy in town centers hit 95.9% in 2024, up from ~90% in 2019.
- Multifamily units in these environments lease up 23% faster than submarket peers and capture a 31% rent premium.
- Office buildings in mixed-use town centers command a 24% rent premium and achieve 10% higher occupancy than comparable suburban assets.
This performance isn’t theoretical. It’s showing up in the data:
- From 2019 to 2024, open-air retail sales per square foot rose more than 30% nationally.
- Categories like beauty and footwear surged 50%+, driving strong tenant renewals.
- Retailers in town centers are maintaining stable occupancy cost ratios even as rents rise, which is a signal that revenues are keeping pace with escalations.
The shift to residential core
In many mature centers, housing is being layered in through entitlements, joint ventures, or phased redevelopment of underutilized parcels: theaters, aging outparcel pads, or sea-of-asphalt parking lots. Local governments are incentivizing this shift. Across 11 U.S. metros tracked by Avison Young, zoning overlays for residential in mixed-use centers have quadrupled since 2020.
For developers, the math works. These sites already have:
- Proven foot traffic and spending patterns
- Brand visibility and community identity
- Infrastructure in place (roads, sewers, transit)
- Institutional ownership with control over land
It’s not about building density from scratch. It’s about unlocking it where the demand already exists.
The proof: five town centers that got it right
- 99% leased across uses
- $1B+ in annual retail sales
- 30M+ annual visitors
- 300+ new multifamily units in development
- Office vacancy: 1.8% (vs. 15.4% submarket)
- Retail vacancy: 1.8% (vs. 4% submarket)
- 24-month retail renewal rate: 92.3% (vs. 57% submarket)
- 95–100% occupied across uses
- Among the region’s most resilient post-COVID office performers
- Class A office vacancy: 3% (vs. 34% submarket)
- Multifamily integrated through multiple phases
- Retail tenants show zero anchor turnover in five years
- Retail sales: ~$1,200/sf
- Retail occupancy: 98%
- Multifamily: 98% leased, with expansion pipeline
- Office and residential rents: well above submarket
- Sold to PGIM for $500M
- Office rents: $13/sf above submarket
- Multifamily: waitlists and long-term tenancy
- Events and programming drive 18-hour activation
- NOI growth: +63% (2019–2024)
- Retail sales/sf: +47%
- Foot traffic: +20%
- Sold in 2025 for $785 million, the largest mixed-use transaction in DFW history
The pipeline: assets hiding in plain sight
They might look like:
- A power center with a national grocer anchor and 3,000 Saturday visitors
- 100,000 to 200,000 sf vacant office primed for residential conversion
- An activation-oriented anchor like a theater, pickleball club, or immersive entertainment venue
Conclusion: buy what already works
The most compelling investment thesis in commercial real estate today isn’t about discovering the next submarket. It’s about doubling down on what’s already proven.
Town centers with integrated uses outperform their peers. They hold tenants longer, charge higher rents, and retain value through cycles. They’re not just retail or office plays. They’re residential platforms with built-in advantages: foot traffic, place identity, and policy momentum.
As more of these centers come to market, some quietly and some with announced redevelopment plans, the best-positioned investors won’t wait for groundbreaking.
They’ll follow the foot traffic.
Reach out to our experts to learn more about how to make the most of this opportunity.
Meghann Martindale, CLS
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- Principal, Director Market Intelligence, Retail
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- Retail
- Market Intelligence
