The Q1 2026 retail reports agreed on several things. First, negative net absorption rates were reported across all five write-ups, with the lone exception being CBRE’s “U.S. Retail Figures.” Still, “multiple bankruptcy filings triggered a wave of closures, which added available space to the market,” the CBRE analysts explained.

Second, those bankruptcy backfills are being snapped up by what Colliers “U.S. Retail Figures” write-up called steady demand, adding that a “clear bifurcation persists, with tight availability for spall spaces and more modest availability among large anchor boxes.

Third, the construction pipeline continues to dwindle. JLL, in its “Retail Market Dynamics” report, said that gross deliveries of 7.8 million square feet were “partially offset by 2.6 million square feet of demolitions, comprising obsolete department stores and underperforming strip centers. As a result, net new supply “equated to roughly 5.2 million square feet for the quarter,” the JLL analysts said.

Additional reasons were given for flat rent growth and negative absorption. Newmark’s “Retail Market Conditions & Trends” said that market uncertainty didn’t help matters as “consumer sentiment continues to be negatively affected by lingering inflation, uncertainty about the job market and the impact of the Iran conflict on fuel costs and potentially other prices.” Still, Newmark analysts and others said that retail sales and consumer spending remain in positive territory.

Meanwhile, Cushman & Wakefield’s “MarketBeat” said that first quarters are generally slower for retail leasing, while “severe winter weather may have curtailed activity more than normal this year.”

As for the outlook, all the reports said that continued supply shortages will continue to exert pressure on rent growth. At the same time, consumer sentiment is worth keeping an eye on. “If elevated oil prices persist, higher costs for gasoline, utilities and consumer products are likely to weigh on household budgets and consumer confidence in Q2 and potentially longer,” said Cushman & Wakefield analysts.

JLL added that the supply situation isn’t likely to change anytime soon, adding that “location will matter more than the national average.” All the reports said that the Sun Belt markets outpaced the rest of the country in retail metrics, driven by population growth. “For the remainder of 2026, performance will be less about the market overall, and more about which markets a portfolio is in,” JLL researchers added.

Colliers forecast that limited supply, combined with robust demand, means a quick backfill, though Newmark analysts noted that backfill activity isn’t showing signs of slowing.

Newmark added that stagnant, older retail space could make the case for additional retail construction. But with construction costs still high and rents unable to justify new development, opportunities could exist in redeveloping underperforming centers “through redesign or mixed-use conversion,” which will remove outdated space from the market and “ultimately reduce the total retail footprint,” Newmark researchers said.

Meanwhile, as retailers are likely to remain cautious about near-term leasing while they monitor consumer conditions, Cushman & Wakefield researchers indicated that a broad pullback is unlikely.

“Assuming easing energy prices and a resilient labor market with only modest unemployment increases, retail demand should remain resilient, supporting vacancy stabilization through year-end,” they added.

Preleasing at Yardi 200 schools hit 89.2% in July, down slightly from 2023’s performance, while rent growth slowed, according to the latest Yardi Matrix National Student Housing Report. The student housing sector was still 5% behind fall 2023 occupancy levels as July ended, although 41 universities in the Yardi 200 have already exceeded occupancy levels of a year ago, led by the University of Nebraska.

As of July, the average advertised asking rent per bed reached $897 at Yardi 200 schools, a 4.7% increase year-over-year. Across the Yardi 200, 36 universities recorded at least 10% Y-O-Y rent growth in July, while 34 schools were below last year’s levels. Markets with high rent growth tended to also demonstrate strong enrollment growth.

“Rents have remained flat for the past five months and rent growth has dropped from close to 7% early in the leasing season as the preleasing pace has slowed,” wrote Matrix analysts. 

The Sun Belt has quickly become one of the country’s hottest regions for commercial real estate, and in North Carolina’s largest city, Charlotte, business is thriving.

Due to the city’s rapidly growing job market and steep increase in population, Charlotte CRE is among the most active markets in the nation — with CBRE ranking the city as the seventh-most-preferred market for investors this year. In 2022, retail saw a record-low vacancy of 3.6%, office space experienced strong Class-A leasing activity and multifamily rent grew at a rate of 10.2%. 

However, like most markets in today’s CRE climate, Charlotte is not immune to unfavorable economic conditions that have made it more difficult to get deals across the finish line, including rising interest rates, tighter capital lending and elevated construction costs. 

But according to Ryan Carver, managing director of multifamily at Charlotte-based architecture and design firm SGA|NW, a GF design company, Charlotte’s CRE market is poised for success despite any short-term uncertainty.

“With inflation leveling off and construction costs stabilizing, we’re still seeing people that are bullish in private development,” Carver said. “In 2024, we may see a slowdown in deal flow if a recession hits, but in 2025, we anticipate the market to bounce back greater than before.”

Bisnow spoke with Carver about the trends the sector is seeing, how economic conditions have impacted deal flow and how the firm structures its deals to keep business moving forward.

Bisnow: What development trends has SGA|NW, a GF design company, noticed in Charlotte this year? Are these trends indicative of a greater development pattern throughout the country?

Carver: The big markets that we’re seeing right now in the nation are the Sun Belt states, especially the Carolinas, Florida and Texas. In these states, we’ve got a lot of people coming in from the Northeast and West Coast. These markets are expanding primarily due to an increase in manufacturing and technology jobs. We’re starting to see a greater life sciences presence, whether that’s medical equipment manufacturers or biotech firms. These are what I would consider to be not only hot markets, but they’re more insulated than some of the other markets in the country.

At SGA|NW, a GF design company, there is a focus on private development. This encompasses multifamily, mixed-use, restaurants, retail and office. In the current market, office space is only going to be successful under particular circumstances. Banks are more tentative about these deals, too. Even when the banks want to lend, regulators are capping them. However, mixed-use and multifamily are doing very well. Next year, the market may go through a slump if we hit a recession. In 2025, I think the market will snap back like a coiled spring. 

Bisnow: How have the tightening capital markets impacted deal flow in Charlotte? What other economic factors have impacted the Charlotte CRE market this year?

Carver: The increase in interest rates over the past year has caused people to become tentative. It doesn’t mean things aren’t moving, it just means quality over quantity. For the deals that are going on right now, for the most part, the capital has already been committed. 

The market is tough because it’s not about where it is now, it’s about where the markets are going to be. Deal structuring is taking longer, the way that developers are analyzing deals is different and increased risk has changed loan-to-value structures. Developers need more equity in the deal. This has adjusted the way lenders and developers are evaluating risk versus reward. To meet the current market conditions, at the firm we initiate value engineering at the earliest stages of design development, ultimately bringing value to the bottom line.

Developers still want to be in Charlotte, but some are finding that all of the “good” or “easy” sites to build are gone. We’ve gotten really creative and immersed in these deals to assist in moving them forward. In the last 18 months, we’ve only had one deal stall, and it’s back on the board again. 

Bisnow: How has the firm creatively structured deals to keep moving forward?

Carver: I’ve been focused on private development/architecture for more than 20 years now, and one of the most important parts of the job is understanding what these deals look like, how they get delivered, being fiscally responsible, understanding the difference between cost and value and knowing how to design according to market performance and trends.

We view our firm as an extension of our client. As part of this professional partnership, we bring the general contractor in early, get real-time market cost feedback and understand that it’s in everyone’s best interest to stay agile and flexible.

Bisnow: What’s next for SGA|NW, a GF design company? And what does the firm think the Charlotte market/economy will look like over the next few years?

Carver: We’re about a year past where the yield curve inverted, so we could potentially be facing a recession in the coming months. I think in 2024 there is going to be a slowdown. When developers are looking to target a delivery, it’s typically in 2025. Developers shouldn’t, and aren’t, taking their foot off the gas. 

I think we will start to see developers looking at different products that maybe we haven’t seen before. Returning to office will eventually happen, as well as a return to bigger metropolitan areas. The public is reacting strongly to interest rate hikes, and this has a strong bearing on the market. Everything is interconnected.

At SGA|NW, a GF design company, we’re going to continue to grow and are slated to take our multifamily expertise national rather than having just regional focus in the next five years. Though there’s some uncertainty in the short term, I’m optimistic about the mid- to long-term outlook in Charlotte as well as nationally.

For further inquiries or to learn more about SGA|NW, a GF design company’s multifamily design services, please contact Ryan Carver, managing director of multifamily at SGA|NW, a GF design company, at rcarver@sganwdesign.com or Danielle Barr, senior marketing manager at GF, at dbarr@greenbergfarrow.com. 

This article was produced in collaboration between SGA|NW, a GF design company and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.

Houston is among several U.S. metros expected to see a significant drop-off in migration for at least the next year, as the city continues to experience large job losses brought on by the combination of the coronavirus pandemic and low crude oil prices.

Prior to the pandemic, certain markets with lower costs of living like Houston, Phoenix, Charlotte, Las Vegas and Atlanta were experiencing significant population growth, correlating with strong job growth. 

That trend could reset in the next year or two, as more expensive, weak-growth markets with highly educated populations may retain and attract more workers, according to new research from CoStar.

CoStar Managing Consultant Andrew Rybczynski told Bisnow that subdued population growth would mean rising vacancy rates in Houston’s multifamily sector, inevitably leading to a slower pipeline.

“Projects that are underway are particularly vulnerable, as they are likely seeing their construction timeline stretched and will probably deliver into a weak demand environment,” Rybczynski said.

“Twenty-five thousand units are underway in Houston right now compared to less than 10,000 in the fourth quarter of 2017. There’s a good chance that units underway number drops down by significant amounts again.”

From 2012 to 2016, year-over-year population growth in Houston ranged from 2% to 2.7%, according to Oxford Economics data. But since Q4 2016, year-over-year population growth has never exceeded 1.8%, and dipped as low as 1.2% in early 2018, Rybczynski said.

That growth recovered to 1.7% in Q1 2020, but given the massive loss of employment across all sectors, it’s likely that there will be lower population growth figures, he added.

Houston consistently ranks toward the top of large markets in terms of growth. Even when Houston is growing slowly — by Houston standards — it still grows quickly in relation to other large metros.

“We expect Houston’s growth to slow through this down cycle, but for it to maintain strong growth compared to other large metros like Los Angeles, New York or Chicago,” Rybczynski said.

It is likely that Houston will still continue to enjoy net in-migration, even if the growth slows. More people were looking to move to Houston between Jan. 1 and April 15 than to leave, according to the latest renter migration report from Apartment List.