Retail Asking Rent Growth Slows to Nine-Year Low
Commercial tenants see rent growth drop to 1.6%, offering potential relief for business owners managing tight margins.
Updated on Oct. 26, 2026 in Commercial
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Do you expect retail rent prices in your area to decrease due to current business costs?
National retail asking rent growth slowed to 1.6% in the third quarter of 2026, marking the slowest pace since 2017. This deceleration impacts small business owners and commercial tenants who are managing tightening operating budgets.
Why it matters
The slowing growth reflects broader economic pressure where tenants are increasingly resistant to rent hikes due to higher operating costs and stagnant sales. This trend forces retailers to become more selective with expansion plans to preserve their bottom line.
National retail asking rent growth fell to 1.6% in the third quarter of 2026, down from 2.9% in the same quarter last year. Growth varied by property type, with power and neighborhood centers rising 2.4%, strip centers and malls at 1.7%, and general retail at 1.0%.
The details
Retailers have become more selective with their expansion plans as they navigate elevated operating costs and lagging sales growth in discretionary categories. Because tenant economics effectively set the ceiling for what landlords can charge, this resistance is translating into the slowest rent growth rates observed since 2017. This shift signals a cooling commercial real estate climate where property owners are struggling to pass through traditional cost increases.
Timeline
Growth in retail asking rents slowed to 1.6% in the third quarter of 2026.
The 1.6% figure represents the slowest pace of rent growth seen since 2017.
Annual asking rent growth was 2.3% during the second quarter of 2026.
In the third quarter of 2025, annual asking rent growth reached 2.9%.
Money Landscape
The current 1.6% growth rate marks a return to the cooling pace last seen during the 2017 commercial retail rent growth cycle. This shift represents a broader departure from the more aggressive rental increases observed as recently as mid-2025.
Business owners should view this cooling trend as an opportunity to negotiate lease renewals or new commercial space agreements with more leverage than in prior years. Before signing any long-term lease, speak with a qualified commercial real estate professional to understand how these trends affect your local submarket.
The takeaway
Commercial tenants are successfully pushing back on rent hikes as they face down significant margin pressure from rising overhead and sluggish sales. Monitor your lease expiration dates closely and prepare to negotiate based on these current market-wide cooling trends rather than historical norms.
Further reading
For more on the current state of retail property costs, explore our Commercial section.
Live Poll
Do you expect retail rent prices in your area to decrease due to current business costs?
