Retail Sector at ‘Inflection Point,’ Study Finds

Amidst retail’s ever-evolving landscape, real estate/ investment management services company JLL’s latest report on the sector reveals one that’s at an inflection point. While net absorption remains negative (-7.5 million square feet) as thousands of announced closures take effect, there’s a lot of upbeat news, including:

• Announced openings (6565) are outpacing closings (5633) in 2025.
• Investment volumes have surged 23% year-over-year to $28.5 billion, exceeding historical averages.
• Construction starts are down 50% and vacancies holding steady at just 4.3%, which means retail’s fundamental resilience is creating strategic opportunities for forward-thinking store operators and investors.

Given those fundamentals, here’s what JLL expects for the sector through the end of the year:

A moderate pickup in net absorption. The lack of new construction has effectively kept availability and vacancy relatively low, so as the previously announced closures fully play out, there should start to be a move towards positive but modest net absorption.

Rents are approaching their peak, and in some markets have begun to decline on a quarterly basis. Going forward, rent growth is expected to stay close to historical averages with rent spreads on spaces leased for 5 or more years persisting at multi-decade highs at least through 2026.

With the passing of the “One Big Beautiful Bill,” the 2017 tax cuts became permanent, which could boost consumer spending and encourage retail property investment.

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