The latest report from JLL indicates that the U.S. retail sector is shifting from recovery to scarcity, with more stores closing than opening in the first quarter of 2026. Vacancies remain low at 4.4%, largely due to minimal new construction, making retail properties appealing for investors seeking better yields compared to other commercial real estate sectors.
Transaction volumes in retail reached over $15 billion in Q1 2026, a 5% increase from the previous year and the highest since 2023. Paul Kurzawa, president and incoming CEO of Centennial, noted that institutional investors are becoming more selective, focusing on core+ assets that offer lower risk and long-term stability.
Institutional investors accounted for nearly 24% of multitenant retail investments over the past year, the highest share since 2017. Additionally, large transactions exceeding $100 million represented 26% of retail investment in the first quarter of 2026, up from 13% in 2023.
However, the limited availability of high-quality assets is creating competition among investors, particularly for larger deals. Kurzawa emphasized the importance of realistic value creation in investment decisions, indicating that overly optimistic projects are less likely to succeed