A New Retail Reality: Local Leases, Global Perspective

Key Takeaways

• Retail leasing is no longer purely local. Even neighborhood retail deals are increasingly impacted by global forces, including tariffs, immigration issues, supply chain disruptions, and international inventory sourcing, that can directly affect build-out timelines, openings, and performance.
• Traditional lease assumptions need rethinking. Letters of intent and lease negotiations must now account for global supply delays, unpredictable inventory availability, and extended lead times for fixtures and materials, requiring more realistic and collaborative planning between landlords and tenants.
• Retail legal support is becoming multidisciplinary and international. Effective retail representation in a globally interconnected economy increasingly integrates employment, immigration, logistics, franchise, and trade capabilities, often in coordination with international partners.

Decades ago, I was working for a mall developer (I say that because we had yet to manage a mall) and the work was relatively straight forward. What were the business terms? Was there co-tenancy? What are the rents? The issues, while often not entirely clear from the letter of intent (“LOI”), were relatively narrow as the tenants and the landlord were all predicting key deal outcomes.

Now, thinking locally may well be predictively simplistic and limiting as we, like it or not, live in a dynamic world economy. Given that I have had the opportunity for many years to deal with attorneys from all over the world, it is interesting to see how even local clients have global issues. That has made working with clients all the more challenging, given that issues dealing with tariffs, immigration, intellectual capital, or even litigation are essential to analyze.

Remembering that the LOI is a narrow document that deals mostly with rents and dates, what happens when a tenant is not open due to issues related to the lack of construction materials or store fixtures or, far more frequently than in the past, due to lack of inventory, all possibilities if these materials are from overseas. I recently noted to a client that his apparel store seemed to be full, and he sadly said that indeed the store was full of the wrong inventory. The inventory the client preferred was not readily available given the unpredictability of the market.

Landlords and tenants need to have realistic conversations about the build-out time. The market today is not just about hammers and nails, it’s about fixtures and materials that are difficult to price and perhaps have lengthy lead times for delivery.

AGG’s Retail team used to be comprised mostly of leasing attorneys with a bit of development thrown in. Now, the team includes employment lawyers, immigration lawyers, franchise lawyers, logistics lawyers, and attorneys who understand tariffs. Predictably, we should assume that the international component of retail will, tariffs or not, continue to grow.

Unlike years ago when retail was, if anything, a segment of a law firm’s real estate group, some large international firms lead today with retail work. AGG works with law firms in many countries (England, Germany, and India come to mind). These firms lead with retail work, and make great partners for AGG, in part because retail and development integrate multiple disciplines and involve numerous teams. These trends will surely continue in the fast-changing TikTok world we live in.

In sum, it is best to calmly analyze the market. Yes, we as lawyers need to understand what the customer wants but, so too, the retailer and the landlords need to better understand the relevance of our interconnected global economy. AGG’s Retail team looks forward to collaborating with our clients in these spaces in 2026.