ICSC 2026: Inflation, Trampoline Parks and the Fate of Luxury

Another year is in the books. Tens of thousands of brokers and investors piled into the Las Vegas Convention Center earlier this week to talk retail at ICSC and Commercial Observer was on the ground to capture the mood.

First: Retail isn’t just recovering anymore — it’s back to being one of commercial real estate’s favorite sectors.

“Every single REIT is having their best year ever from a leasing perspective,” said JLL’s Naveen Jaggi at a breakfast for reporters. However, this is tempered by the fact that “NOI hasn’t gotten there yet” to reflect this strength.

Indeed, coming off a long fallow period of underdevelopment, leasing and investment are very healthy for the real estate that remains.

“The entire landlord community is benefiting right now from a long trend of not constructing a lot of shopping centers, the demolition of some shopping centers — some older malls — and a resurgence of growth in a lot of retail brands,” CBRE’s Scott Schnuckel told CO. To wit, there has been a rise of retail construction in the South and West Coast.

NewMark Merrill Companies CEO Sandy Sigal also captured the market’s realism: capital is pouring into retail, but political risk, tariffs, interest rates and artificial intelligence could all reshape the next leg of the cycle. But he told CO his biggest long-term bet was still physical space, because as work, shopping and communication become more digital, the value of real-world connection should rise.

“If I make one bet, I think as the world gets more disconnected through electronics, robotics, all the trends that you’re seeing in front of you — the value of human connections is going to go up,” Sigal said. “You’re going to see more and more people visit centers they care about. … I think the premium on visiting physical space is going to go up.”

Second, inflation and consumer behavior is on many minds.

“The largest topic of discussion [among the senior ranks of ICSC] is the rise in inflation,” Jaggi continued. The consumer sentiment reflects nervousness about gas prices and inflation. “That being said, part of the disconnect between how you spend and how you feel is that day’s headlines and what channel you watch.” Those invested in the blue chip companies on the stock market are feeling good. Those who are paying $100 to fill up their gas tanks are not.

And while shopping continues apace, the way people are shopping is changing.

“When it comes to nondiscretionary visits, we’re continuing to see consumer shopping more frequently — partly because they’re looking for better deals,” said Elizabeth Lafontaine, director of research for Placer.ai. “They are not necessarily looking for a one-stop shop right now. They’re looking for a retailer that can offer them the best value or the best convenience or the best experience. They’re willing to travel longer and make more stops because that’s what they’re focused on.”

Likewise, discount dollar stores have benefited from consumers trading down amid rising gas prices and inflation.

“There’s certainly an economic component to that, but I also think it’s how those stores have upped their merchandising game. I don’t think it’s all attributable to just a shift in spending,” said Meghann Martindale, Principal and Director of Retail Market Intelligence at Avison Young. “I think it’s because merchandise has also gotten better at a lot of those discount stores.”

Third, brokers are eager to figure out the proper balance of tenants at shopping centers, especially now that fears of an e-commerce-led demise have been largely subdued.

“We’re really focused on understanding the tenant remix,” said Alanna Loeffler of Cushman & Wakefield. “It’s what we call everything under the umbrella of these new tenant categories — and the shift taking place at shopping centers, lifestyle centers, neighborhood centers. Really understanding what that mix is made up of, and what centers are strong and why.”

Luxury brands had long been one of the more reliable players in the market, but that, too, has been in the middle of a rethink.

“Rather than more activity in terms of people opening stores [the last year] was more about, ‘What are we actually doing with brands?’” said Anthony Selwyn, cohead of prime global retail at Savills. “Fundamentally, a lot of the [luxury] brands sat on their hands and didn’t really advance. Someone like Gucci — [which was] very aggressive over the last five to 10 years in taking stores — realized they just got too many stores and the brands aren’t performing at the appropriate level.”

However, some of the luxury brands have been extremely shrewd in luring in new generations of buyers like the collaboration between Audemars Piguet and Swatch, and caused such a frenzy among buyers that Swatch stores needed to be closed down because of safety concerns.

Fourth, entertainment has been riding high — including areas one wouldn’t necessarily have guessed a few years ago like trampoline parks. (There are more than 350 trampoline parks and kid zones in the works.)

“We have 16.5 million square feet [of entertainment retail] planning to open in the U.S. and Canada,” said JLL’s James Cook, “which I have to say is staggering — we did not expect to find so much.” 

And no conference would be complete without some kind of conversation about AI.

Adam Palmer, executive vice president at CBRE and CCIM President, told Commercial Observer about Intellisite, CCIM’s new tech platform for real estate data and analytics that Palmer said aligns better with the AI era. Palmer said Intellisite is often viewed as a site-selection tool, especially for retail brokers, but it can help users evaluate a range of objectives from identifying which tenants should backfill a vacant space to analyzing demographics and traffic patterns.

Overall, when it comes to AI’s rapid movement on commercial real estate, Palmer was optimistic but cautious. He said it is still early — and compared the moment to the “Friendster era” before MySpace and Facebook — and he warned that many firms are chasing tools before defining the operational problems they need to solve.

“We’re at a really interesting intersection of technology and commercial real estate, and I think we’ve barely scratched the surface of what these technologies will enable,” he said. “Just having an algorithm doesn’t make something artificial intelligence. But ‘AI’ sells — it’s today’s ‘organic.’ … If you label a product ‘AI-powered,’ it suddenly sounds more valuable.”