CoStar data seen by The Wall Street Journal indicates that service-based tenants leased more than 50 percent of total retail square footage in 2025, up from 40 percent 15 years ago. The shift to service-oriented retail leasing is fueled largely by the spread of fitness centers, medical spas, and specialty salons. S.
S. 1 trillion in 2024, accounting for 32 percent of the global total, according to a Global Wellness Institute report. 4 percent of all retail activity last year, leading clothing and office supply stores to frequently downsize their physical footprints.
Property owners are finding that subdividing large, vacated retail spaces can be highly lucrative. For example, Brixmor subdivided a 10,200-square-foot former liquor store in Philadelphia into four smaller units, with the new tenants generating 20 percent more rent than the previous occupant, according to Brian Finnegan, CEO of Brixmor.