Why Mixed-Use Retail Keeps Failing – and Where Developers Have an Opportunity to Get It Right

Written by:

Steve Marcinuk

Date:

10 Jun 2026

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Across American cities, the story of mixed-use development often follows a familiar arc: a developer unveils plans for a “vibrant, walkable destination,” ground-floor retail space gets designed into the project, and a few years after opening, those storefronts sit half-empty. The vision was compelling. The execution fell short.

According to Ann Ehrhart, Founder and CEO of Boston-based EVERSTREET, the problem usually starts long before a single lease gets signed. Most developers bring in retail leasing expertise too late, after the project has already been designed. By then, critical decisions about square footage, tenant mix, and underwriting have already been made, often without a realistic read on whether the retail vision is achievable.

EVERSTREET, which Ehrhart founded four years ago after two decades in retail brokerage, operates at the intersection of retail strategy, leasing, and execution, primarily across New England, with a growing national reach. The firm works with developers, institutional owners, investors, and municipalities, all of whom increasingly recognize that retail is more than an amenity line item.

Leasing Risk vs. Creation Risk

At the heart of EVERSTREET’s approach is a distinction that rarely surfaces in conventional real estate conversations: the difference between leasing risk and retail creation risk.

Leasing risk is familiar territory. An established location exists, consumer demand is present, tenants are actively looking for space, and the primary challenge is finding the right fit at the right rent. Retail creation risk is different; it applies when a project attempts to build a retail ecosystem from scratch in a corridor where consumer and tenant demand hasn’t yet been established.

Ehrhart argues that too many projects treat creation risk as if it were leasing risk, jumping straight to whether 20,000 square feet of retail can be leased, rather than asking whether 20,000 square feet of retail should exist there at all. “It isn’t a retail leasing risk, it’s a retail creation risk,” she says. “Can this retail ecosystem actually be built? Will consumers actually adopt it?”

Failure to ask these questions early enough leads to the chronic vacancy and tenant turnover that plague so many mixed-use projects.

A Framework for Reading Corridors

To address this gap, EVERSTREET classifies retail corridors into three categories before developing any planning or leasing strategy.

The first is the destination corridor, locations like Newbury Street in Boston or the Design District in Miami, where built-in consumer and tenant demand is strong, foot traffic is diverse, and national retailers actively compete for space. These corridors are performing well right now, Ehrhart notes, with significant private equity backing retail expansion into established, high-traffic locations.

The second is the convenience corridor, neighborhood-serving retail that primarily draws on the surrounding residential or daytime population. These locations are more limited in scope but remain essential to how cities function day-to-day.

The third, and most complex, is the untested corridor, a location with no adjacent retail activity, or one that was once active but has since declined. “When you have no retailers operating in the area and nobody shopping there today, that’s an untested corridor,” Ehrhart says. “I can’t stress the importance of understanding what kind of corridor you’re working in, because it influences just about every planning, leasing, and execution decision you’re going to make.”

The classification rests on what Ehrhart calls “market demand,” a combination of consumer depth, spending behavior, and active tenant interest. When both sides of that equation are strong, a corridor earns destination status. When only one or two consumer segments are present, or tenant interest is limited, it falls into convenience territory. When neither is established, the strategy must account for a significantly higher risk.

Identity as a Value Driver

Retail also plays a role that extends well beyond lease revenue. Ehrhart frames it in terms of identity, the idea that retail shapes how people experience and describe a place, which in turn influences long-term asset value.

The restaurants, cafes, fitness concepts, and gathering spaces within a development define its character. A neighborhood with a strong retail identity tends to have stickier residential tenants, lower turnover costs, and greater appeal to capital. “When you have a strong location, every action item in the asset management chain gets easier,” Ehrhart notes. That logic is what draws institutional investors and municipalities to EVERSTREET’s work; they see retail identity as a lever for broader value creation.

When Retail Goes Wrong

For spaces that have already fallen into chronic vacancy, Ehrhart’s team takes a diagnostic approach, examining whether the problem lies in merchandising, design, underwriting, or some combination of all three.

One key nuance: retail underwriting doesn’t work the same way as other asset classes. A 2,500-square-foot corner space might attract a bank willing to pay $150 per square foot, a local bakery-café at $65 per square foot, and a boutique fitness studio at $45 per square foot. All three figures can be accurate market comps; they simply reflect what each tenant category can sustainably pay as a percentage of revenue.

Ehrhart explains that a coffee shop should comfortably pay eight to ten percent of its sales in rent, so underwriting has to be calibrated to whether a location can support the merchandising mix that would actually make the space work. “When we look at the underwriting, we say, can this support the merchandising that we want?” she says.

The longer a space sits vacant, the harder recovery becomes; it develops a stigma beyond the practical questions of square footage and rent. But EVERSTREET’s view is that there’s generally a path back; the difficulty depends on how many variables need to be realigned simultaneously.

What Tenants Are Working Right Now

Experience-driven tenants are outperforming traditional retail formats across the corridors where EVERSTREET is active. Food and beverage, fitness, entertainment, and social concepts are drawing foot traffic in ways that product-focused retail often isn’t.

“What we’re seeing really get people out and spend money is a lot of experience-driven concepts,” Ehrhart says. “Food, fitness, fun, entertainment, I think that’s going to continue to be a big trend in the types of tenants we see occupying space.”

This pattern is already influencing how retail gets programmed into new developments, with lifestyle centers gaining traction as a format that aligns with how consumers want to spend time outside their homes.

Boston on the Ground

In Greater Boston, where EVERSTREET is most active, conditions track closely with the firm’s corridor framework. Destination corridors are strong, neighborhood convenience retail is holding up, and daytime-population-driven locations are transacting but require more effort. The broader challenge isn’t retail demand itself but project delivery.

“Construction is more expensive, financing is more expensive, and entitlements are taking longer than they ever have before,” Ehrhart says. “The bigger risk right now is just getting overall projects to go forward.”

One of EVERSTREET’s current flagship engagements is Longwood Place, a six-acre master-planned development in Boston’s Longwood Medical Area, one of the most active healthcare and research districts in the country. The project aims to create a new center of gravity for the people who work, live, and visit the area, and EVERSTREET has been involved since the planning and entitlements phase.

The Core Question

For developers and investors still asking whether retail is back or broken, Ehrhart answers that the question itself is the problem. What matters is what kind of corridor a project sits in, and whether the strategy in place accounts for the actual level of risk involved in making retail work there. The projects that get this right early tend to attract tenants, residents, and capital. The ones that don’t often end up with half-empty storefronts and a costly lesson in the difference between drawing retail on a plan and building it in the real world.

About the Expert: Ann Ehrhart is the Founder and CEO of EVERSTREET, a Boston-based retail real estate strategy and leasing firm she founded four years ago after two decades in retail brokerage. The firm works with developers, institutional owners, investors, and municipalities primarily across New England, with a growing national reach.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.