While many retail properties struggle with e-commerce competition, one surprising segment is attracting major institutional capital: unanchored shopping centers. According to George Wommack, CEO of Headwall Investments, these centers’ heavy concentration of service-based tenants makes them uniquely positioned to thrive in the digital era.
“Over 90% of these portfolios are service retailers, as opposed to goods retailers. So it’s very e-commerce resistant,” says Wommack, whose firm focuses on unanchored shopping center acquisitions across major Texas metros. This service-heavy tenant mix creates natural protection against online competition, since services like restaurants, salons, and medical offices can’t be replaced by e-commerce.
This resilience hasn’t gone unnoticed by institutional investors. “We’re currently seeing a shift to where more and more institutional money is flowing into the space,” Wommack notes. “It has been a fairly rapid shift over the course of the second half of ’24 into ’25.”
The data supporting institutional interest comes from an unexpected source, a major public REIT’s strategic reorganization. “Site Centers Corp saw that unanchored shopping centers… from a risk, return profile, stability of cash flow, occupancy percentage, performed very similarly to grocery anchored shopping centers,” Wommack explains. This led Site Centers to spin off its unanchored properties into a new public REIT called Curbline.
According to Wommack, Curbline’s success has validated the sector, with the company trading at implied cap rates around 5.5% – comparable to premium retail assets. This performance has caught the attention of institutional investors who previously overlooked the category.
Headwall Investments, which has built a $220 million portfolio primarily backed by high-net-worth individuals and family offices, aims to acquire three to five additional properties this year. Wommack says they target centers with strong demographics, excellent visibility, and proximity to residential areas.
“These properties draw most of their customers from the one to three mile radius,” Wommack explains, highlighting how local service providers create stable, community-focused retail environments that resist broader retail disruption.
The growing institutional interest suggests unanchored shopping centers may be entering a new phase of maturity and recognition, one that could reshape how investors view retail property risk in an e-commerce world.
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