The U.S. retail real estate market has entered a period of renewed expansion and reinvestment, with public credit tenants leading the charge. After years of e-commerce disruption and pandemic volatility, the brick-and-mortar retail sector is experiencing a broad-based resurgence. National retailers with investment-grade credit ratings, particularly those occupying 30,000 square feet or more, are once again expanding, relocating, and transforming their store footprints. At the same time, supply constraints and strong consumer demand are fueling growth across major Sun Belt metros.
According to CoStar data, nine of the top 10 U.S. retail markets in 2024 are located in the Sun Belt, including Phoenix, Orlando, and Las Vegas. These markets are benefiting from robust population growth, limited new retail supply, and low vacancy rates, which have helped drive average retail rent increases of over 3% year-over-year (CoStar, Dec. 2024). Meanwhile, total net absorption for U.S. retail space exceeded 53 million square feet in 2023, further underscoring the demand from active retailers.
Creditworthy Retailers Are Doubling Down on Physical Growth
Investment-grade retailers are aggressively expanding or remodeling their physical locations, using omnichannel strategies to merge online and in-store experiences. Off-price chains such as TJX Companies (A rated) and Ross Stores (BBB+) plan to open more than 200 new stores combined over the next two years, with typical footprints in the 22,000 to 30,000 square foot range. Big-box giants like Walmart (AA) and Target (A+) are rolling out next-generation formats, including Target’s new 150,000 square foot prototype and Walmart’s plan to open 150 stores over five years and remodel 650 stores in 2024 alone.
Warehouse clubs like Costco (A+) are expanding into high-growth metros with new 150,000 square foot locations, while grocers such as Kroger (BBB) continue to invest in new stores and major remodels, particularly in anticipation of its Albertsons merger. Other players including Dick’s Sporting Goods (BBB), Lowe’s (BBB+), and Macy’s (BBB-) are scaling new experiential or small-format concepts that require high capital investment in interiors and tenant improvements.
Each of these retailers is actively building or transforming dozens of locations per year. Many of these stores carry tenant improvement (TI) budgets ranging from $3 million to $15 million per location, depending on buildout complexity. This creates a substantial, recurring need for capital-efficient financing options that allow tenants to preserve liquidity while continuing their expansion trajectories.
Where the Opportunity Lies: Sun Belt and Strategic Redevelopment
While these tenants are national in footprint, their expansion is concentrated in high-growth U.S. metros. The Sun Belt—led by cities such as Dallas-Fort Worth, Houston, Atlanta, Orlando, and Charlotte—has become the primary engine of retail growth. These regions are seeing elevated leasing activity, above-average rent growth, and a resurgence in ground-up development.
Developers and landlords in these markets are investing in new open-air centers and redeveloping aging malls into mixed-use destinations. For example, Simon Property Group (A rated) is executing a $4 billion redevelopment pipeline nationwide, repositioning underutilized malls by bringing in new big-box and experiential tenants. These projects often require large up-front tenant improvements, particularly when converting old anchor spaces into vibrant multi-tenant environments.
The Dolfin Advantage: Unlocking Capital for Expansion
Dolfin, a financial firm specializing in unsecured tenant improvement financing, is uniquely positioned to support this new wave of retail growth. Dolfin provides credit-based, sale-leaseback TI financing solutions ranging from $2 million to $300 million per transaction—ideal for large-format retail tenants and developers seeking capital-efficient buildout funding.
Unlike traditional lenders, Dolfin structures financing as a long-term lease obligation, allowing tenants to unlock working capital from buildouts without diluting equity or pledging assets. For expanding retailers with strong credit profiles, this means preserving liquidity and accelerating market rollouts.
As national retailers re-invest in their physical presence, particularly in the Sun Belt and top-performing metros, TI financing will be a critical enabler of growth. Dolfin’s tailored approach aligns capital with strategy—providing retailers and landlords the flexibility to move fast, build smart, and scale with confidence.
Want to learn more about Dolfin’s tenant improvement financing options? We’re happy to talk. Contact us!
