California AB 380 Could Freeze Your Retail Rents—See the Loopholes Before It’s Too Late

By Marc Perlof | MarcRetailGuy CA #01489206 June 15, 2026 If you own retail real estate, here’s what just changed for you. In a buyer’s market, pricing discipline matters more than optimism. Retail property owners who understand how buyers think during weaker markets usually protect more value than owners who continue pricing based on past market conditions. When buyers gain leverage, they become more selective, move slower, and focus much more on risk. That changes how retail properties are priced, negotiated, and sold. In the previous article, “When to Adjust Price vs Hold Firm on Your Retail Property,” I discussed how owners should interpret buyer behavior, pricing feedback, and negotiation pressure once a property hits the market. What Changed What happens in a buyer’s market? In a buyer’s market, buyers gain more negotiating power because there are fewer active buyers compared to the number of properties for sale. Investors know they have more options, which changes how they negotiate. That usually slows down transactions. Buyers take longer to make decisions, ask more questions during due diligence, and review future risks more carefully before making offers. This is especially true for NNN properties, shopping centers, strip centers, and multitenant retail properties where buyers are closely reviewing tenant quality, how soon tenants may need to renew their leases, property repairs that still need to be completed, and future operating expenses. Why are buyers becoming more cautious? Buyers are becoming more careful because the margin for error is smaller today. Higher interest rates, more expensive financing, rising insurance costs, and economic uncertainty are causing investors to focus more on protecting themselves from future problems. Instead of focusing mostly on upside potential, buyers are asking: Will the tenants remain stable? Can rents hold up if the economy slows? Will future expenses increase faster than income? Will future buyers still want this property several years from now? That mindset affects pricing directly. Why It Matters Why do pricing mistakes hurt more in buyer driven markets? In buyer driven markets, aggressive pricing can reduce activity quickly. When buyers believe a property is overpriced, many simply move on instead of negotiating. That can create a difficult cycle for sellers. Limited activity often leads to longer time on market, weaker leverage, and growing buyer concerns over time. Buyers also become more aggressive once they believe a seller may eventually lower pricing. However, that assumption is not always correct. Some retail property owners are financially stable, are not highly motivated to sell, and are willing to wait if pricing does not reflect the property’s long term value. What concerns are buyers focused on most? Buyers today are closely reviewing anything that could create future problems. This includes: short lease terms property repairs that still need to be completed relying too heavily on one tenant for income weak tenant sales rising operating expenses poor common area maintenance (CAM) recovery structures older building systems future repair costs Even if a property is performing well today, buyers may still lower their pricing if they believe future risks are increasing. That is why clean, stable, and predictable retail properties are usually performing much better than properties with uncertainty or operational problems. Strategic Advice for Retail Property Owners Should you lower pricing quickly in a buyer’s market? Not automatically. Owners should avoid repeatedly lowering pricing out of frustration or fear. Frequent price cuts can weaken buyer confidence and make sellers appear desperate. Instead, pricing adjustments should be based on consistent feedback from qualified buyers. How do you reduce buyer fear? In buyer driven markets, reducing uncertainty becomes extremely important. Owners should review anything that could create concerns for buyers. This includes how organized the leases, financial records, and property information are, as well as any repairs that still need to be completed. Buyers will also pay close attention to lease expiration dates, common area maintenance charges and reimbursements, NNN expense responsibilities, lease options, rent increases, guarantor strength, and who is responsible for major items such as the roof, HVAC system, and parking lot. The easier it is for buyers to understand the property and its future risks, the more confidence they usually have during negotiations. When might waiting make more sense than selling? Not every market is ideal for selling. In some situations, extending leases, improving tenant quality, resolving deferred maintenance, increasing NOI, or waiting for financing conditions to improve may create better long term results than selling immediately. That does not mean owners should avoid selling in weaker markets. It means owners should understand whether they are selling from a position of strength or reacting emotionally to market uncertainty. What should sellers focus on most? The goal in buyer driven markets is not simply attracting offers. The goal is building buyer confidence while protecting leverage as much as possible during negotiations. Owners who reduce uncertainty, position their properties correctly, and respond strategically to buyer concerns usually perform much better than owners who rely only on aggressive pricing. Real Deal Insight We are beginning to see buyers usually lower what they are willing to pay when they see uncertainty in today’s retail market. Properties with organized financials, stable tenants, and fewer future concerns are consistently attracting stronger pricing and smoother negotiations. Owner Self Assessment If buyers reviewed your property today, would they see stable long term income or future problems they need to price into the deal? If you are considering selling and want to understand how buyers would likely evaluate your property in today’s market, reach out directly. I will walk you through how investors are reviewing pricing, lease risk, operating expenses, and future value before you make a decision. Are you positioning your property to reduce buyer fear or unintentionally increasing it? In the next article, “How to Price Retail Property in a Seller’s Market,” we will discuss how strong buyer demand changes negotiation strategy, pricing leverage, and competitive bidding environments. Based in Los Angeles. Serving Southern California. Active across California. Advising clients nationwide.  #RetailRealEstate #NNN #ShoppingCenters #StripCenters #CommercialRealEstate #InvestmentSales #CapRates #RetailProperty #LosAngelesCRE #1031Exchange

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