MD retail real estate adapts to post-COVID trends

While much of the commercial real estate conversation in recent years has revolved around drive-throughs and pad sites – freestanding buildings within larger commercial developments –  Maryland’s retail landscape is evolving far beyond burger windows and curbside pickup.

Across the region, developers and leasing executives are navigating a market shaped by post-pandemic consumer behavior, hybrid work, rising construction costs and the ever-present demand for convenience. Industry leaders say the market is strong – if you know what to build and where.

“We’re seeing some of the strongest fundamentals in the retail sector I’ve seen in my career,” said Blake Dickinson, vice president of net lease strategy at Continental Realty Corporation, a Baltimore-based firm with more than 8 million square feet of commercial space across 13 states. “Occupancy rates in most mature shopping center environments are sitting well into the mid-90% range. That’s created a situation where a lot of retailers have had to become more flexible to meet store opening demands.”

That flexibility includes everything from embracing smaller footprints to moving from standalone drive-through buildings to inline spaces, or adjacent establishments, within shopping centers – something that would have been unthinkable for many brands just a few years ago. But the pursuit of visibility and access remains paramount.

“Retailers are always looking for well-located properties with strong demographics such as density, household income and growth potential,” Dickinson said. “And convenience is king. That’s why drive-through access remains in such high demand. It’s not just a pandemic trend, it’s a fundamental shift.”

Bill Holzman, vice president of retail leasing at St. John Properties in Baltimore, agrees.

“Every new retail strip we develop is designed with the ability to accommodate a drive-through,” Holzman said. “For some users, it’s a must-have. But we’re also seeing more requests for smaller footprints at 1,500 to 2,200 square feet with outdoor seating and flexible layouts. It’s all about efficiency and flexibility.”

Small footprints, big impact

The new wave of retail includes modular, prefab buildings such as those used by emerging coffee establishments such as Dutch Bros and 7 Brew. These drive-through-only shops can operate on as little as half an acre, which is far smaller than the traditional one-acre pad site, and they are rapidly expanding into Maryland.

“We’re seeing national interest from groups like Scooter’s Coffee and 7 Brew, which are looking for strategic locations,” Dickinson said. “Because their buildings are so compact, they can go places other users can’t, which lowers the barrier to entry.”

It’s not just coffee and sandwiches. Dickinson noted that other businesses, such as those offering dry cleaning kiosks and ice-and-water vending machines, are testing similar models. “It’s a fascinating time,” he said. “Retail is incredibly fluid. What’s popular today might be gone in five years, but the fundamentals remain: strong location, visibility, access and convenience.”

Why car washes are booming

Among the most unexpected players in today’s retail game? Car washes.

“Car washes have been red hot,” Holzman said. “A couple of years ago, buyers wanted to own the real estate. Now we’re seeing more ground lease deals. Operators want to grow their portfolios quickly in hopes of being acquired by private equity.”

That interest is driving rapid expansion. Across the country, private equity firms are aggressively backing car wash operators, attracted by the subscription-based revenue model and the potential to consolidate fragmented markets. Maryland, while slower to develop due to zoning restrictions and limited pad site availability, is part of the national rush.

“In central Maryland, the surge is being driven by a combination of strong demand and limited supply,” Holzman said. “This region was underserved in terms of modern, freestanding car washes set up for a membership model. Now operators are playing catch-up, but development isn’t easy. There’s a shortage of available land, and the entitlement process can be tough.”

Flagship operators are getting creative: retrofitting older spaces, acquiring former restaurant pads and adapting sites originally designed for fast food. With acquisition potential in sight, every new location is seen as both a profit center and a strategic play.

The rise of amenity-driven retail

The legacy of the pandemic is still shaping retail design. Online ordering, curbside pickup and dedicated parking for mobile app users are now standard expectations, not perks.

“We’re seeing more retailers incorporate reserved pickup lanes and rethink how the flow of their site works,” Holzman said. “They don’t want to lose those digital customers they picked up during COVID.”

Health care and service tenants are also reshaping the landscape. CRC’s Padonia Village Shopping Center in Timonium has been transformed by a dynamic mix of tenants: a grocery store anchor, a medical clinic and a child care center.

“You can drop off your kid at day care, pick up your groceries and swing by the doctor all in one visit,” Dickinson said. “That’s the kind of sticky, community-serving mix we’re trying to create. And it’s not just retail anymore, it’s about daily needs.”

Looking ahead: Maryland-specific trends

While both executives say Maryland mirrors many national retail trends, the region brings its own mix of opportunities and constraints. The state’s entitlement process, limited land availability and zoning challenges can complicate new development, but they also foster creativity and intentional planning.

Retailers and developers are adapting by focusing on what works: convenience, mixed-use flexibility and smaller, more efficient formats. From grocery-anchored centers to medical and child care tenants, open-air shopping environments continue to perform well across suburban and infill markets.

And both Dickinson and Holzman agree that long-term success lies in meeting evolving consumer expectations, not in pursuing fads.

“We don’t try to chase trends,” Dickinson said. “We try to build for the long term. And that means staying focused on what works: strong communities, convenient locations and a retail mix that reflects how people actually live.”