Weekly Real Estate News
Annual U.S. retail asking-rent growth slowed to just 1.6% in the third quarter of 2026, the weakest pace since 2017, according to new data from CoStar Group.
The October 26 report found that rent growth eased from 2.3% in the second quarter and 2.9% a year earlier, even as the market experienced a second consecutive quarter of solid tenant demand. The findings suggest that retailers’ ability to absorb higher occupancy costs is increasingly limiting landlords’ pricing power.
Rent growth cools across every retail format
CoStar said all major retail property categories posted slower annual asking-rent growth than a year earlier. Power centers and neighborhood shopping centers recorded roughly 2.4% annual growth, while strip centers and malls were near 1.7%. General retail properties, the largest segment by inventory, recorded approximately 1.0% growth.
Brandon Svec, CoStar’s national director of retail analytics, attributed the slowdown in part to elevated operating expenses and retailers’ greater selectivity about expansion. Tenants in discretionary categories face particular pressure when sales growth does not keep pace with rising costs.
Sharp differences among major markets
Among metropolitan markets with at least 100 million square feet of retail inventory, Cincinnati led with 6.2% annual asking-rent growth, followed by Nashville at 5.3% and Charlotte at 5.0%.
By contrast, asking rents declined 1.4% in Pittsburgh and 1.3% in San Diego. These figures describe asking rents across the broader market rather than the rents negotiated in any particular lease.
Why some shopping center owners are reporting larger rent increases
The national slowdown comes as several publicly traded shopping center landlords have reported substantial rent increases on newly signed or renewed leases. Those measures are not directly comparable.
Asking-rent growth tracks changes in advertised rental rates across the market. Leasing spreads compare rents on particular newly signed or renewed leases with rents previously paid for the same space. A landlord can report a strong leasing spread even while broader market asking-rent growth slows.
The distinction matters for investors evaluating retail real estate: demand may remain relatively healthy, but new rent increases can become harder to sustain as retailers weigh occupancy costs against sales.
CoStar’s findings are based on its proprietary property-market data and have not been independently reproduced from underlying property-level records.
Source: CoStar Group’s third-quarter retail asking-rent report, published October 26, 2026.
