Institutional capital is continuing to flow into the U.S. retail sector despite a slower start to leasing activity in 2026, according to JLL’s Retail Market Dynamics Q1 2026 report.
The report found net absorption totaled 4.4 million square feet in the first quarter, reflecting a softer start to the year similar to the pattern seen in early 2025 before the market rebounded. JLL said limited new supply continues to support market fundamentals, with just 5.2 million square feet of net new inventory delivered during the quarter. Gross deliveries reached 7.8 million square feet, offset by 2.6 million square feet of demolitions.
The report also highlighted continued demand for high-quality retail space, with 36 percent of new leases signed within five months of a space becoming vacant.
Tenant expansion activity remains concentrated among food, grocery and discount retailers. Starbucks plans to add 175 locations this year, while Dollar Tree is targeting 400
