Shopping center landlords are feeling the pressure as retailers are increasingly pulling back on leasing.

The first quarter of the year marked the weakest three-month period for shopping center leasing since 2020 when the pandemic put stores on lockdown, The Wall Street Journal reported, citing Cushman & Wakefield data.

Overall, tenants vacated nearly 6M SF more than they occupied in the quarter, according to Cushman & Wakefield. Last year, retailers closed roughly 1,300 more stores than they opened, according to Coresight Research.

The slowdown comes as a tsunami of bankruptcies have hit, forcing stores to consolidate their portfolios in a matter of months. A Bisnow analysis previously found that at least $8.7B of CMBS loans are backed by properties where bankrupt retailers have decided to terminate their leases over the past year.

Plus, it follows a time of rapid expansion when low rents pushed the shopping center vacancy rate to its lowest in decades. In the fourth quarter of 2023, it was just 5.3%. Some shopping center owners then saw bankruptcies as an opportunity to secure higher rents from more stable tenants.

That has continued to happen, with Burlington reaching a deal to take over 45 shuttered Joann locations. Still, the vacancy rate ticked up in the first quarter to 5.5%.

Moving ahead, publicly traded retailers have lowered their earnings guidance for this year as inflation and tariffs have fractured both their current balance sheets and future plans.

Fitch Ratings has lowered its outlook on the restaurant sector from “neutral” to “deteriorating.” On top of growing costs for food and equipment, the agency expects immigration policies such as mass deportations to drive up wages, Restaurant Business reported.

Restaurant chains have already reported weakened earnings in recent weeks, which executives have blamed on dampened consumer sentiments causing lower- and middle-income shoppers to eat at home more often.

The White House and China announced a temporary deal Monday to reduce by more than 100% the duties companies would pay to import goods into the U.S., but the tariff rate is still 30% higher than it was last year. Shares in retail REITs rose an average of 2.5% by early afternoon trading after the agreement, according to Nareit.