Retail rents are rising at a 2.4% annual rate, as availability of space falls to 4.9%

Available retail space is quickly filling up this year and for leases expiring in 2027 and 2028.

Retail rents are rising at a 2.4% annual rate, outpacing the 10-year average, amid record-low deliveries, according to CBRE. Three consecutive quarters of positive net absorption has kept the availability rate low, at just 4.9 percent at the end of the first quarter.

Occupancy is extremely high, particularly in high-quality, grocery-anchored suburban centers, and in many markets, such as the Sun Belt.

It's no longer retailers taking up retail space. It's now, restaurants of all types, entertainment, educational providers, medical and other services that are chasing good retail space for proximity to customers in suburban America. According to Ebere Anokute, head of retail research for the Americas at CBRE, last year was the first time that more retail space was leased by service tenants than by tenants selling actual goods.

Add to that the lack of new development, and you have a condition where occupancy and rents increase to meet demand for space. Construction for retail space is currently at historic lows with 2025 and early 2026 ranking among the weakest periods for new retail development in this century.

Read more: Why Retail Shines On (Commercial Property Executive)