Two Economies. One Country. Zero Middle Ground.

America doesn’t have a consumer economy anymore. It has two—and they’re speeding in opposite directions.

Economy One: High-income households spending freely. Luxury retail thriving. Premium experiences selling out.

Economy Two: Middle and lower-income consumers in full retreat. Discretionary purchases slashed. Every dollar scrutinized.

Here’s the question that matters: Which economy do your tenants serve?

The Top Quintile: Spending Like Nothing Changed

Affluent households aren’t just okay—they’re thriving.

• Stock portfolios up
• Home equity at record highs
• Employment rock-solid
• Balance sheets healthy

These consumers are dining out, traveling internationally, and buying premium goods without checking prices. For them, the economic squeeze is something they read about. Not something they feel.

The Lower Quintiles: Death by a Thousand Cuts

For everyone else? The math stopped working.

Years of elevated inflation gutted purchasing power. Credit cards filled the gap—until they maxed out. Delinquency rates are climbing. The pandemic stimulus “excess savings” that economists kept referencing? Gone.

Now these consumers face daily trade-offs:

• Restaurant meals → skipped
• Name brands → swapped for store brands
• Purchases → indefinitely deferred

This isn’t temporary belt-tightening. It’s a structural shift in spending behavior.

What This Means for Your Rent Roll

For retail landlords, bifurcation creates a brutal sorting mechanism.

Who’s Winning

✅ Luxury and premium brands — Affluent consumers keep spending
✅ Value retailers — Dollar stores, off-price apparel, discount grocers capture the trade-down

Who’s Losing

❌ The squeezed middle — Mid-market department stores, casual dining chains, discretionary retailers serving the middle class

That tenant serving struggling consumers? They may be current on rent today.

They may be announcing store closures tomorrow.

The Real Risk You’re Not Measuring

Most landlords track rent collection. Few track consumer exposure.

Ask yourself:

• What percentage of your rent roll depends on middle-income discretionary spending?
• Which tenants serve consumers who are one emergency away from cutting back further?
• What’s your plan when renewal time comes and that tenant wants concessions—or exits?

If you don’t have clear answers, you have clear risk.

Take Action Before the Market Forces You To

Map your exposure now. Segment each tenant by target consumer. Identify concentration risk. Build contingency plans for vulnerable positions.

Don’t wait for a vacancy to discover the problem.

Is Your Tenant Mix Positioned for This Reality?

Williams Capital Advisors specializes in helping retail property owners navigate market shifts like this one. We’ll evaluate your tenant mix against today’s bifurcated consumer landscape, identify exposure risks, and uncover re-tenanting opportunities before problems surface.

Schedule your complimentary portfolio review today.

(213) 880-8107 | francisco.williams@williamscap.ai | williamscapitaladvisors.com

Don’t let tenant risk become your surprise.