U.S. retail fundamentals continued to improve in the third quarter of 2026, with national net absorption reaching 8.3 million square feet, according to JLL’s latest quarterly sector report. This follows 10.2 million square feet of net absorption in the second quarter, marking the second consecutive period of positive demand for retail space across the country.
Over the past 12 months, the retail market has absorbed 24.4 million square feet. JLL reported that this performance represents a sharp reversal from conditions a year earlier, when the sector recorded a net loss of 7.0 million square feet over the prior 12-month period. The shift back into positive territory underscores the extent of the demand recovery within brick-and-mortar retail.
National retail vacancy edged down to 4.3% during the third quarter. JLL attributed part of this tightening to the interaction between new supply and demolishment activity, noting that some new deliveries have been effectively offset by buildings being removed from inventory. This dynamic has helped prevent vacancy from rising even as new product comes to market.
In addition to improving space absorption, retailer expansion plans have been net positive so far in 2026. Year-to-date, retailers have announced 5,800 store openings compared with 4,000 closures. This marks a reversal from 2025, when closures outpaced openings, and signals that more brands are adding locations than shrinking their physical footprints this year.
On the pricing side, JLL reported that national market asking rents increased 1.8% over the past 12 months. However, with consumer prices rising 3.7% over the same period, asking rents are declining in real terms even as nominal rents trend upward. The firm added that the current pace of rent growth is roughly in line with historical averages, suggesting neither overheated nor unusually weak conditions.
JLL also pointed out that headline asking rents do not fully capture the economics owners are achieving on newly signed leases. According to the report, publicly traded retail landlords are seeing new lease deals executed at levels well above expiring rents. These owners are also reporting larger annual rent increases within leases and smaller concession packages, indicating that underlying leasing terms are improving even if top-line rent statistics appear modest.
Taken together, the data from JLL’s report portrays a U.S. retail sector that has moved from contraction to measured growth, with tighter vacancy, positive net absorption, and net new store openings supporting landlord leverage in many negotiations, even as inflation tempers real rent gains.
