U.S. retail construction activity declined in the third quarter of 2026
Business Wire•21/10/2026•09:00 ET
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Key Highlights
- ➤58.3 million square feet under construction in Q3, down from 60.6 million in Q2
- ➤7.7 million square feet of new starts, lowest quarterly total since at least 2016
- ➤Retail construction pipeline 4% below its prior 10-year average
- ➤Texas trio holds 15.5 million square feet, nearly 27% of national pipeline
- ➤CoStar expects retail pipeline to shrink further before meaningful recovery
Expert Statements
Brandon Svec, National director of retail analytics at CoStar Group
“The pullback in construction reflects a development environment that remains difficult to pencil in most markets.”
Brandon Svec, National director of retail analytics at CoStar Group
“Elevated land prices, construction costs and borrowing costs have pushed required rents well above prevailing market levels for many retail formats, and flat asking rents during the quarter did little to close that gap.”
Brandon Svec, National director of retail analytics at CoStar Group
“Third-quarter construction data supports our current view that retail supply growth will remain limited for the foreseeable future.”
Brandon Svec, National director of retail analytics at CoStar Group
“Based on current conditions, with starts at their lowest level in at least a decade and financing costs moving higher, we expect the pipeline is likely to shrink further before any meaningful recovery takes hold.”
U.S. retail construction activity declined in the third quarter of 2026
U.S. retail construction activity pulled back in the third quarter of 2026, according to data from CoStar , the leading global provider of online real estate marketplaces, information and analytics in the property markets.
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