CHC believes retail remains one of the more attractive real estate sectors, supported by high occupancy, limited new construction, resilient consumer demand and relatively attractive cap rates. As of the first quarter of 2026, occupancy was 95.6%, in line with its 10-year average, while asking rents grew 2.5% over the prior year. New deliveries represented only 0.2% of existing inventory, providing a favorable supply backdrop.

Tight leasing conditions are creating opportunities for landlords to recapture space and mark below-market leases to current rents. On average, rents on new strip-center leases are approximately 29% above in-place rents, producing blended cash leasing spreads of 14%. This mark-to-market opportunity is expected to support net operating income growth over the next several years. Leasing activity remains concentrated in smaller-format spaces, with retail suites under 5,000 SF accounting for approximately 80% of all lease transactions in 2025. This trend continues to benefit neighborhood and strip center formats relative to larger-box retail. Transaction activity has also improved, particularly for larger multi-tenant strip centers.

CHC is primarily focused on smaller strip centers that serve daily, needs-based demand. These assets benefit from minimal new supply and resilient leasing demand, creating opportunities to generate value through institutional asset management, leasing execution and targeted development in undersupplied markets. CHC favors markets with high occupancy, low construction, positive in-migration and stable employment growth, while remaining selective in markets with weaker relative fundamentals.