Finding opportunities in a tight real estate market
In a market where expanding retail brands are looking beyond obvious trade areas into secondary and tertiary markets, many turn to Gordon Brothers.
In early 2026, Gordon Brothers Real Estate Services secured more than a dozen new engagements, including helping lead the M&A transaction between Phillips Pet Food & Supplies and Central Garden & Pet, supporting Advance Auto Parts on a portfolio initiative, assisting Grocery Outlet with store closure evaluation, fixture and real estate disposition, and helping LEGO open more than a dozen new stores. The firm’s work spans M&A advisory, portfolio strategy, lease mitigation, disposition, assignee and subtenant procurement, and growth advisory.
Chain Store Age sat down with Gordon Brothers executives James Avallone and Caleb Smith to discuss how the real estate market has evolved.
CSA: You’ve both seen a lot of change in the retail real estate industry. Tell us, how did we get to such a complex place?
Avallone: After years of historically low interest rates, post-pandemic inflation has pushed rates higher, tightening access to capital. The negative impact that higher interest rates have had on new retail construction projects has been further compounded by skyrocketing construction costs due to import tariffs. This combination continues to have a significant impact on the industry. Rents are much higher.
Smith: Retailers in growth mode are increasingly forced to look at existing space, particularly second-generation boxes and spaces coming out of distress. We’re seeing pressure mount on both ends of the spectrum — for retailers looking for new locations as well as those looking to right-size their footprints.
CSA: It’s a tough spot, for sure. How has the game changed, specifically?
Smith: Healthy retailers are still in growth mode, but the way they expand has become far more strategic. We are typically brought in to help connect the real estate strategy to the broader business objectives, using data and analytics to identify where stores should be, how they should perform and what the portfolio should look like over time.
At the same time, optimizing a portfolio often means making disciplined decisions about underperforming locations. Our team is able to blend objective analysis with real-time market execution. That allows retailers to move quickly and confidently, whether that’s securing new sites, restructuring existing leases, or exiting locations in a way that maximizes value. The biggest differentiator is being able to translate that insight into action and deliver measurable outcomes across the entire portfolio.
Avallone: We’ve also developed a unique approach to assist retailers to grow by navigating the complex nature of companies in distressed situations, such as bankruptcy or liquidation. In this tight real estate market, those channels have become an increasingly important source of supply. Because we work across the full business lifecycle, we’re able to connect clients to opportunities that may not be visible through traditional channels and help them act quickly and strategically.
Smith: Exactly, Jim. Clients are searching for insider insight that helps align real estate decisions with their broader strategies. By leveraging our deep knowledge, they’re able to move quickly and efficiently when opportunities arise, reducing the time it takes to secure locations that support their growth.
CSA: How closely do you engage with retail real estate directors throughout the process?
Avallone: Retailers need partners who have the breadth of experience and the depth of expertise to navigate uncertainty. And that’s how we approach every engagement — as a partnership, working with clients through the full lifecycle from strategic planning through an ongoing optimization process. Our goal is to unlock opportunities that others can’t.
Smith: Because we’re a lender, an investor, and an advisor, we bring a uniquely informed perspective to the retail industry. Backed by the broader Gordon Brothers platform, we’re also able to bring capital to the table, stand behind our underwriting and guarantee outcomes.
James Avallone is a senior managing director, and Caleb Smith is a managing director on the North America real estate services team at Boston-based Gordon Brothers.