United States Retail Market Dynamics Q1 2025

The Q1 2025 U.S. retail market saw significant shifts as previously announced store closures began to take effect. For the first time in 16 quarters, retail net absorption turned negative, totaling -2.7 million square feet. However, the freed-up space is quickly being snatched up by expanding retailers, with nearly one-third of new leases signed within 5 months of listing.

Value retailers and food & beverage tenants continue to dominate new openings, while grocery-anchored centers remain in high demand among investors. Despite some headwinds, cautious optimism prevails as the Fed plans interest rate cuts.