Institutional investors are returning to retail real estate

Institutional investors are increasing their focus on retail real estate as the sector shows low vacancies, limited new construction, and stronger yields than many other commercial property types. According to JLL, U.S. retail vacancy stood at 4.4% in the first quarter of 2026, while more stores closed or downsized than opened or expanded. At the same time, retail investment transaction volume topped $15 billion, up 5% from a year earlier and the highest firstquarter total since 2023. JLL said institutional investors accounted for nearly 24% of multitenant retail investment over the past 12 months, the highest share reported since 2017. The biggest deals have drawn more attention, but investors are also becoming more selective, especially as highquality properties remain in limited supply.