Retail Trends 2025: What’s Shaping Long Island’s Retail Market

As we move through 2025, the retail real estate market continues to evolve—and Long Island remains a compelling example of how national trends take on a unique local flavor. From adaptive reuse and experiential concepts to evolving tenant mixes, investors who understand how these shifts play out across Nassau and Suffolk Counties are best positioned for success in 2026 and beyond.

Brick-and-Mortar Retail Is Still Standing Strong on Long Island

Despite years of “retail apocalypse” headlines, brick-and-mortar retail on Long Island continues to prove its staying power. Grocery-anchored centers, service-oriented strip malls, and well-located convenience plazas remain some of the most stable investment assets on the market.

Suburban shopping corridors like Route 110 in Farmingdale, Jericho Turnpike, and Nesconset Highway continue to attract discount and necessity-based retailers. These businesses thrive on accessibility and convenience—two strengths that Long Island’s suburban landscape delivers.

Rather than being overshadowed by e-commerce, physical stores are playing a critical role in omni-channel strategies—serving as fulfillment centers, brand showrooms, and community touchpoints. For investors, properties that can accommodate these functions continue to provide dependable returns and long-term tenant retention.

            “Long Island’s retail market isn’t just surviving; it’s evolving with purpose. The most successful centers today are those that combine convenience with experience and necessity with community. When you understand neighborhood demand at the street level, you can match the right concept to the right trade area and create long-term value for both landlords and tenants.”
–John Pacifico, NAI Long Island’s Retail Specialist

1. Adaptive Reuse Creates New Life for Older Retail Properties

On Long Island, where available land for new development is limited, adaptive reuse has become one of the most effective ways to unlock value. Former big-box spaces and aging shopping centers are being reimagined into medical offices, fitness centers, mixed-use developments, and even residential units.

From the repurposing of former Sears and Kmart locations to the transformation of traditional malls into lifestyle or healthcare destinations, adaptive reuse projects are reshaping the local retail landscape. These investments not only stabilize occupancy but also align with community needs—offering long-term resilience even when retail cycles shift.

2. Experiential Retail Draws Consumers Back

The demand for experience-driven retail is surging. Shoppers are increasingly seeking connection, entertainment, and authenticity—qualities that local Long Island retailers and property owners are uniquely positioned to provide.

From the dining and entertainment mix at The Shoppes at East Wind to open-air centers like Walt Whitman Shops, successful retail environments are those that make visiting feel like an event. Spaces that can support hybrid use such as restaurants, fitness, wellness, or artisan markets—see higher engagement, stronger sales, and more loyal customer bases.

For property investors, this means focusing on flexibility. Properties that can accommodate experiential tenants through adaptable layouts and creative leasing strategies are outperforming traditional, transactional retail models.

3. Smaller Footprints and Pop-Up Concepts

Retailers are increasingly scaling down their footprints and opting for shorter lease terms to remain agile. Pop-up shops, seasonal tenants, and store-within-a-store models are becoming popular ways for brands to test new markets across Long Island.

Landlords who offer modular buildouts or shared retail spaces—especially in high-traffic downtown areas like Huntington, Patchogue, and Babylon—can attract emerging brands and maintain consistent occupancy. This shift benefits owners by broadening tenant diversity and keeping retail centers dynamic and relevant.

4. A Shift in Tenant Mix and Lease Flexibility

Long Island retail centers are evolving beyond pure retail to include service, healthcare, and entertainment tenants that drive consistent daily traffic. Many landlords are rethinking their tenant mix to balance traditional stores with experiential and service-based offerings—creating a blend that keeps customers coming back for multiple reasons.

Additionally, lease structures are becoming more collaborative, with turnover-based or percentage rent agreements aligning landlord and tenant success. These flexible models foster stronger relationships and provide stability in fluctuating economic conditions.

5. Supply Constraints Increase Demand for Quality Assets

With rising construction costs and zoning challenges slowing new retail development, existing properties in prime Long Island locations are more valuable than ever. This supply constraint is pushing demand toward well-maintained, accessible centers with strong visibility and parking—especially those anchored by necessity retailers.

Owners who continue to reinvest in modernization—such as updated façades, outdoor dining areas, and EV charging stations—are securing premium tenants and commanding stronger rents.

6. Economic Factors Still Matter

Macroeconomic trends continue to influence local retail investment decisions. Inflation, consumer spending habits, and interest rates shape expansion plans for both national and regional tenants. Despite these pressures, retail sales and occupancy on Long Island remain resilient, particularly in centers catering to essential goods and services.

According to national data from the U.S. Census Bureau, retail sales were up nearly 5% year-over-year as of late 2025—a positive sign that consumer demand continues to support well-located physical retail.

Key Takeaways for Long Island Retail Investors

To stay ahead in 2026, investors should:

• Focus on adaptive reuse of aging assets to unlock untapped value.
• Prioritize experience-driven tenants that draw consistent local traffic.
• Offer flexible space and leasing models to attract innovative retailers.
• Diversify tenant mixes with healthcare, service, and entertainment uses.
• Invest in modernization to maintain competitiveness amid supply constraints.

The Bottom Line

Long Island’s retail real estate market is evolving—not declining. As the region continues to balance suburban convenience with community engagement, investors who adapt to new trends will find strong opportunities ahead.

At NAI Long Island, we understand that successful retail investment requires more than location—it demands vision, adaptability, and strategic management.

Contact our team to learn how we can help you navigate Long Island’s retail landscape and position your portfolio for long-term performance.