The U.S. retail sector closed 2025 on firmer footing, with fundamentals returning to positive territory after a period of disruption earlier in the year. A strong holiday shopping season, stable availability and renewed absorption point to a market that has largely weathered the wave of mass retail closures announced in late 2024 and early 2025.
This report provides an in-depth look at the economic conditions and demand drivers influencing retail performance, leasing trends across formats and geographies, and the capital markets activity underpinning renewed investor confidence. Explore where retail is tightening, which markets and formats are outperforming and how productivity gains are reshaping the long-term outlook for retail real estate.
Key Takeaways:
- Retail fundamentals turned positive in 4Q25, with 7.4M SF of net absorption as the market absorbed early-2025 closures
- Availability remained tight at 5.3%, well below the long-term historical average
- A strong 2025 holiday season reinforced consumer resilience, supporting year-end retail sales momentum
- Retail productivity continues to rise, with sales per SF up 4.2% YoY and more than 45% above pre-pandemic levels
- Demand is increasingly selective, favoring newer, well-located assets as older stock drags on performance
- Retail investment rebounded in 2025, reaching $66.8B in sales volume and setting a new benchmark for large transactions
