Your Retail OM Is Being Compared to CBL Whether You Mention It or Not

CBL & Associates surrendered three more retail properties this week — Kentucky, Pennsylvania, Virginia — with CMBS debt attached to each. That's at least six property surrenders in recent months from one operator.

If you're marketing retail right now, that's your context. Every buyer you send your offering memorandum to has seen those headlines. Before they reach page one, they're already sorting your asset into a category. The question is whether your OM helps them sort correctly.

Most don't. They describe the property, list the tenants, present the financials, and leave the positioning work to the buyer. In a market where "retail" now covers everything from grocery-anchored centers at near-record occupancy to enclosed secondary-market malls being surrendered with CMBS debt attached, that's the wrong move. The retail OM's job in 2026 isn't to describe what you have. It's to position what you have against what's failing — before the buyer does it for you.

The Bifurcation Has Numbers Behind It

Retail isn't one market. The spread between the two ends is documented.

JP Morgan's 2026 CRE Trends puts retail net absorption at 3.8 million square feet per quarter. The five-year historical average is 9.8 million. That looks like weak demand. It isn't. New supply is essentially zero. Occupancy in grocery-anchored and necessity-based retail is at near-record levels. The absorption number is low because buyers and tenants are being selective — not because demand collapsed. An OM that presents that figure without context leaves the buyer with something that looks alarming and isn't.

For single-tenant net lease retail, the market has already priced the bifurcation precisely. Boulder Group's Q4 2025 final data:

| Tenant | Q4 2025 Cap Rate | |--------|-----------------| | McDonald's | 4.38% | | Chick-fil-A | 4.45% | | 7-Eleven | Sub-6% | | Walgreens | 7%+ | | Pharmacy sector avg. | 7.49% |

That 260-basis-point spread between McDonald's and Walgreens isn't location or lease structure. It's credit. Randy Blankstein at Boulder Group said it directly in Q4: "Cap rates were largely unaffected in 2025 despite multiple rate cuts in the second half of the year." The market stopped waiting for rate cuts to drive cap rate compression. It started pricing tenant risk instead.

If your offering memorandum has a QSR anchor or an investment-grade grocery tenant, that spread belongs in the document. The market already knows how to price the credit. Your OM just needs to show where your tenant lands on the spectrum.

What Most Retail OMs Are Missing

Three sections absent from most retail offering memorandums right now:

1. Tenant credit context — not just lease terms and square footage, but the credit profile for each major anchor. Corporate vs. franchisee guarantee, store-level sales where available, comparable transaction cap rates for that tenancy type. The data above shows how the market prices McDonald's vs. Walgreens. If you have one and not the other, that context belongs in the document, not just in your pitch call.

2. Asset class differentiation. CBL's surrenders are enclosed secondary-market mall CMBS. Simon Property Group's Penn Square Mall in Oklahoma City — a $310 million CMBS loan — just negotiated a two-year extension rather than a payoff. Those are specific failures in a specific category. If your asset isn't in that category, say what it is. Grocery-anchored strip. Power center with non-mall anchors. Single-tenant NNN with investment-grade credit. The buyer needs that distinction stated, not assumed.

3. Absorption context. The 3.8 million SF quarterly figure looks like a depressed market without explanation. With explanation — near-zero new supply, high occupancy in the right product type — it reads as a supply-constrained market with sustained demand. An OM that explains the dynamic gives the buyer data to work with. An OM that presents the raw number without context leaves a conservative gap the buyer fills on their own.

Why Leaving It to the Buyer Fails

Buyers fill information gaps with their own assumptions. Their assumptions are always more conservative than yours.

When an offering memorandum doesn't address the obvious question — "is this the kind of retail that's getting surrendered to lenders?" — the buyer answers it themselves. They might get it right. They might not. Either way, you've given up the positioning.

The Simon / Penn Square situation is instructive. A $310 million CMBS loan on a large regional mall, matured and restructured into a two-year extension, is a resolved deal — not a foreclosure. That's the kind of context that tells a buyer "yes, some retail CMBS is in distress, but here's how deals are being resolved." If your asset's debt is clean, your tenancy is in the creditworthy category, and your occupancy reflects actual demand rather than concession-driven retention, that's material. Put it in the document.

The retail offering memorandum in 2026 is a positioning document before it's a financial summary. Buyers already know what's failing. They've read the same CBL headlines you have. The OM's job is to show why this asset isn't in that category — with specific data, comparable transaction pricing, and market context that makes the buyer's analysis easy.

When buyers have to do that work themselves, they find conservative answers.