The quarter
US retail net absorption totaled 708,000 square feet in the second quarter of 2026, recovering from a negative first quarter, according to Cushman & Wakefield's Q2 2026 US Retail MarketBeat published July 15. National vacancy was 6.0%, up just three basis points from the prior quarter and well below the historical average of 7.4%.
Asking rents reached $25.65 per square foot, up 2.2% year over year. New deliveries totaled 2.3 million square feet, with the active construction pipeline representing less than 0.3% of existing inventory.
Year to date, absorption remained negative at -2.7 million square feet despite the positive second quarter. Regionally, the West was the only area with a vacancy decline, easing 10 basis points to 5.8% while adding 1.3 million square feet of absorption.
Scarcity, not strength
Analysis: the retail sector's low vacancy rate is primarily a supply phenomenon. A pipeline under 0.3% of inventory means essentially no new competitive space is entering the market, so even negative year-to-date absorption barely moves the vacancy rate.
That distinction matters for how the numbers should be read. A 6.0% vacancy rate driven by construction scarcity behaves differently from one driven by tenant expansion: it is more stable in a downturn, because there is no supply overhang, but it also cannot signal genuine demand growth.
The report's macro backdrop was mixed. Retail sales rose 6.9% year over year, or 5.4% excluding gasoline, with unemployment at 4.2%. But the personal saving rate fell to a four-year low of 3.0% in April and May — consumer spending supported by reduced saving rather than by income growth is a fragile foundation for retail tenant demand.
Divergent measurements
As in the office sector, the major brokerages published materially different figures for the same quarter. CBRE reported Q2 retail rents at $24.79 per square foot, up 2.4% year over year, against Cushman & Wakefield's $25.65 and 2.2%. JLL's Q2 2026 US retail report gave net absorption of 10.2 million square feet, more than fourteen times Cushman & Wakefield's 708,000 square feet.
The absorption gap is the larger of the two and reflects definitional differences — which property types, size thresholds, and markets each firm includes — rather than a factual dispute.
The practical guidance is to follow one series consistently rather than compare across them. On rent growth, where the firms are closest, the agreement on roughly 2% annual growth is the more reliable signal.
The tenant mix behind the numbers
Retail vacancy near 6% coexists with continuing store closures, which is possible because the composition of retail tenancy has changed rather than shrunk.
Space vacated by department stores and discretionary chains has in many cases been re-leased to categories less exposed to online competition — grocery, health services, fitness, quick-service food — often at different rents and with different build-out requirements. Net absorption of 708,000 square feet in a quarter is a small positive number that can conceal a large volume of churn in both directions.
The year-to-date figure of -2.7 million square feet is the honest summary of 2026 so far: the positive second quarter did not offset the negative first.
Analysis: the West's 10-basis-point vacancy decline to 5.8%, the only regional improvement, is a thin result on which to build a regional thesis from one quarter. The stronger conclusion from this release is structural rather than cyclical — with almost nothing being built, retail vacancy is unlikely to move much in either direction regardless of how tenant demand evolves.