United States Retail Market Dynamics Q1 2026

The U.S. retail market entered 2026 with negative net absorption of -4.4 million square feet, mirroring last year's first-quarter pattern. However, structural scarcity continues to support fundamentals, with new supply at historic lows and vacancy holding steady at 4.4%. Restaurants, discount retailers and grocery operators lead tenant expansion, while apparel and electronics contract sharply. National rent growth has slowed to 2.0%, but Sun Belt markets significantly outpace this average. Institutional investors are aggressively targeting retail assets, driving Q1 2026 transaction volume above $15 billion - the strongest first quarter since 2023.