The U.S. retail sector’s available space and investable inventory continues to remain scarce into 2026, according to data from CoStar. Even as national net absorption has fallen in three of the past five quarters, availability has held flat and remains about 15% below its prior 10-year average.
Minimal retail space coming onto the market has allowed the sector to absorb pockets of softer demand without becoming oversupplied. It has also shaped rent and pricing dynamics, CoStar reported.
“The pipeline of new supply remains very thin, and most development activity continues to skew toward freestanding build-to-suits rather than multi-tenant product,” said Brandon Svec, national director of retail analytics at CoStar Group, who is scheduled to present at ICSC Las Vegas on Tuesday. “Construction costs across much of the country are pushing into a range where developers often need blended rents north of $30-$35 per square foot, and very few markets can justify building spec strip and shopping center space at scale.
“Blended national market rents sit closer to the mid-$20s per square foot on average, which leaves a significant gap between what the market is currently paying and what new product costs to deliver,” he continued. “Until that gap narrows, low available inventory is likely not just a story, but rather the operating environment.”
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