Retail space available for lease has decreased almost 200 million square feet from its pandemic high in 2020, and more than 400 million square feet since its high after the Great Recession. With intense competition among tenants attempting to nab prime locations, conditions have tilted to a landlord-favorable market. 

As a result, not only do rents continue to rise, but expanding retailers are also jumping on spaces as soon as – and sometimes even before – they become available. Over 80% of retail spaces listed over the last year have been leased within six months; nearly half have been leased within a mere three months. Hence, the average time from space listing to lease execution has compressed to 8.5 months – the swiftest pace in over two decades.

Landlords are wielding much greater pricing power, often holding firm in rent negotiations. They are also being more selective in their choice of tenants. Markets in the South and Southwest continue to see some of the strongest rent gains, propelled by consumption-driven demand and population growth.