ICSC Red River 2025 Takeaways: Investor Optimism, Market Adjustments, and Financing Realities

The energy at ICSC Red River 2025 was overwhelmingly positive, with strong investor interest and valuable opportunities exchanged. Slatt Capital’s Matt Mueller, Makenzie W. Campbell, along with Cody Charfauros, John Darrow, and Michael Kaplan were on hand for the active and well-attended event. The phrase “Texans love doing business with Texans” truly resonated, reflecting the bullish outlook on Texas retail opportunities.

Here are the top takeaways from ICSC Red River 2025, focusing on investment activity, new construction, and financing dynamics:

Investor Sentiment & Market Activity

• Increased Appetite to Transact – Investors showed a growing interest in existing retail assets, signaling a bullish start to 2025 with anticipated higher deal volume throughout the year.

• Adjusting to Financing Realities – While buyers and sellers are more aligned, pricing expectations continue to evolve, adjusting to higher financing costs.

• Secondary Markets in Focus – Many investors are exploring secondary markets in search of better yield and opportunities, highlighting Texas’ continued appeal.

• Neighborhood Retail: A Divided Outlook – Sentiment on neighborhood commercial remains neutral, with some owners optimistic about long-term fundamentals while others are uncertain about micro-market dynamics.

New Construction: Optimism with Challenges

• Cautious Optimism in Development – While investor interest in new construction remains, high construction costs and limited new supply continue to be hurdles.

• Emerging Lenders in NNN Development – New entrants in debt and high-leverage financing for NNN construction reflect a bullish stance when compared to other asset classes.

• High Leverage Doesn’t Equal Better Rates – Despite new capital inflows, financing remains expensive, and high leverage loans don’t necessarily offer better terms.

• Rising Costs Impacting Feasibility – Deals remain difficult to pencil, as construction and financing costs are limiting new supply.

Financing Market: Shifting Strategies

• Move Toward Alternative Financing – Traditional banks are cautious and constrained, leading to increased activity from life insurance companies, credit unions, bridge lenders, and debt funds.

• Deposit Demands from Banks Softening – While banks still request deposits, the pressure has eased slightly.

• Q4 Rate Cuts Confuse the Market – Short-term financing and construction lending have seen improvements, but long-term financing has yet to experience similar gains.

• Bridge Debt in High Demand – Many investors are turning to bridge loans due to:

• Speed concerns (when other lenders couldn’t close on time).
• Higher leverage needs for value-added projects and renovations.

• Long-Term Debt Shows Liquidity & Tight Spreads – Despite higher long-term Treasury yields, the market is seeing significant liquidity and tighter spreads, helping offset some of the cost pressures.

The 2025 ICSC Red River conference showcased renewed confidence in the retail sector, with investors ready to transact and developers adjusting to the realities of today’s financing environment. While challenges persist, particularly around construction costs and traditional lending constraints, the availability of alternative financing and strong investor appetite suggest a dynamic and active year ahead for Texas retail real estate.