Shopping centers recorded 3.5 million square feet of net absorption in Q3, with fitness, wellness and value retailers leading leasing activity
New York – U.S. shopping center demand remained solid in the third quarter of 2026 as retailers backfilled vacated stores and selectively expanded their footprints, according to Cushman & Wakefield’s latest U.S. Retail MarketBeat report. Limited construction continued to support market fundamentals, with national vacancy holding steady at 5.9%, well below the historical average of 7.4%.
Net absorption totaled 3.5 million square feet in Q3, the second-strongest quarterly reading since Q4 2023, bringing year-to-date absorption into positive territory at 1.2 million square feet. The improvement followed first-half declines that reflected seasonal weakness and the effects of store closures in 2025.
“Retail demand has remained solid beneath the quarterly fluctuations,” said James Bohnaker, Principal Economist at Cushman & Wakefield. “Retailers are backfilling space left by earlier closures and continuing to expand selectively. For tenants looking to grow, finding the right space in a quality shopping center remains a challenge.”
Fitness, wellness and value-oriented retailers are leading categories for leasing activity, reflecting a continued shift toward consumer services and demand for affordable shopping options. Discount retailers accounted for 1,046 store openings year to date, while off-price apparel retailers added 214 locations.
New construction remained limited, with just 2.3 million square feet delivered during the quarter. The development pipeline represented only 0.4% of existing inventory. National asking rents reached $25.80 per square foot, up 2.2% year over year, although the pace of growth moderated.
“With so little new space being built, even modest expansion can keep availability tight,” Bohnaker said. “Consumer spending is holding steady, but retailers remain disciplined about where they open stores. Well-located centers with strong tenant mixes are best positioned to capture that demand.”
Demand was positive across several regions. The West absorbed 1.4 million square feet and remained the only region to record positive absorption in every quarter of 2026, led in Q3 by Phoenix, the Inland Empire and Orange County. The Northeast recorded 1.2 million square feet of absorption, with vacancy declining in eight of its 11 tracked markets.
The Midwest led regional asking rent growth at 3.6% year over year, with Columbus, Cincinnati and St. Louis among the strongest-performing markets nationally. The South accounted for 52% of year-to-date construction completions but maintained the lowest regional vacancy rate at 5.7%.
Cushman & Wakefield expects retail fundamentals to remain resilient through year-end, supported by limited new supply and continued tenant demand. Performance will vary by market and property, with location, tenant quality and retailers’ value propositions remaining key differentiators.
Cushman & Wakefield’s quarterly retail report can be found here.
