U.S. retail projections remain unchanged through 2026 in a just-released forecast from CoStar, the leading global provider of online real estate marketplaces, information and analytics in the property markets.
Consistent with the previous forecast, which had U.S. retail vacancy peaking at just under 4.4%, the metric is expected to rise minimally in the first half of 2026 before falling slightly during the latter half of the year and into 2027.
Though receding, store closures are expected to increase in the first half of 2026 as the bifurcated retail sales environment pushes certain tenants to trim locations. Full-year net absorption is forecasted to total just over 16 million square feet, which would be the third lowest level of annual demand formation recorded in the past decade, behind 2020 and 2025.
“Underpinning the stable outlook was the resumption of positive demand in the back half of 2025,” said Brandon Svec, national director of retail analytics at CoStar Group. “After two consecutive quarters of falling demand, retail fundamentals stabilized in the third quarter as the pace of closures slowed and backfill demand surged. With higher demand, the wave of store closures seemingly cresting, and new supply remaining elusive, performance is forecasted to remain in balance for the foreseeable future.”
“There are both upside and downside risks to the forecast, though the balance currently tilts to the downside,” said Svec. “Continued uncertainty persists around the impact of tariffs, and although retailers and suppliers have largely absorbed these costs so far, many are signaling imminent price increases, which could further strain household budgets and dampen discretionary spending.”
The full forecast can be found here.
Source: “CoStar’s U.S. Retail Projections Remain Steady Through 2026“
