ARLINGTON, Va. — U.S. retail asking rent growth continued to moderate in the first quarter of 2026, rising 1.9% year over year, according to new data from CoStar Group.
The latest figures extend a slowdown that began in 2024, bringing rent growth to its lowest level in more than a decade. Analysts said the trend reflects a shift toward more stable market conditions following stronger gains in the years immediately after the pandemic.
Brandon Svec, national director of retail analytics at CoStar Group, said the moderation is tied in part to a slight increase in retail vacancies and slower tenant sales growth, which have reduced landlords’ ability to raise rents at previous rates. He added that the current environment reflects a normalization rather than a decline in demand, with leasing activity and occupancy levels remaining relatively stable.
According to the report, rent growth decelerated across most major U.S. markets, though regional differences persist. Several Sun Belt cities, including Phoenix, Orlando, Atlanta, and Charlotte, continued to post year-over-year increases, though at a slower pace than earlier in the cycle.
Midwestern markets showed comparatively stronger performance. Minneapolis recorded the highest annual rent growth at 6.9%, with Columbus, Milwaukee, Cincinnati, Kansas City, and St. Louis also among the stronger-performing markets.
CoStar said that as rent-to-sales ratios return to historical norms and operating costs remain elevated, retailers are showing increased resistance to further rent increases, particularly in discretionary spending categories.
