U.S. Retail Shopping Centers Poised for Record Prices in 2026

U.S. Retail Shopping Centers Poised for Record Prices in 2026

Despite facing challenges like e-commerce growth, a global pandemic, and rising interest rates, U.S. shopping centers have proven remarkably resilient. As we head into 2026, these retail centers are attracting significant investment, making them one of the hottest sectors in commercial real estate.

With more investors targeting a limited supply of retail assets and a relatively optimistic outlook for interest rates, shopping center prices are set to reach new highs in 2026.

Investment Surge

Investment in retail assets skyrocketed in 2025, with 28 retail-focused funds raising $4.5 billion—more than six times the previous year’s total. While some fund targets are undisclosed, this figure reflects a dramatic rise in retail investment. Institutional investors, previously hesitant, are now returning to the sector as challenges mount in the office and multifamily markets.

Publicly traded retail REITs and private investors remain active, with REITs preferring acquisitions over new developments. Private investors, who historically drive more than half of retail property sales, continue to aggressively pursue assets.

Increasing Transaction Activity

The surge in investment capital is reflected in growing transaction activity. By November 2025, 1,303 large shopping center sales were completed, surpassing 2024’s total of 1,344 transactions.

Stronger Retail Fundamentals

Retail property fundamentals have strengthened in recent years. Despite store closures, demand from expanding retailers in off-price, discount, fitness, and experiential sectors has quickly filled vacancies. In addition, small-shop vacancy rates are at their lowest in over two decades, driven by strong demand from food, beverage, healthcare, and personal service tenants.

These dynamics have fueled the fastest five-year rent growth since 2007, with record-high retail rents and substantial increases in net operating income for shopping centers—key factors attracting investors.

Limited Supply and Pricing Pressure

Retail supply remains constrained due to minimal new construction and a gap between replacement costs and current values. By late 2025, only 767 shopping centers of 50,000+ square feet were listed nationwide, a sharp contrast to the 1,303 centers that sold by December.

The scarcity is particularly acute for large grocery-anchored centers in Sun Belt and Tier 1 suburban markets, creating fierce competition among institutional buyers.

Record Pricing Trends

This supply-demand imbalance is driving up prices. In 2025, the average price per square foot for shopping centers over 50,000 square feet rose to $142.23, a significant increase from $125.11 in 2024. Lifestyle centers saw the steepest climb, reaching $277.56 per square foot.

Many properties have traded for significantly higher values, with 81 centers selling for more than double the average price in 2025, compared to 53 in 2024 and 40 in 2023.

Outlook for 2026

With strong fundamentals, limited supply, and substantial investment capital, shopping centers are likely to see continued price escalation. If inflation remains controlled and consumer spending stays steady, 2026 could set an all-time high for retail center pricing.