JLL: Retail Investment Hits Mid-Cycle ‘Sweet Spot’
(Illustration credit: Burst via Pexels)
JLL, Chicago, says the U.S. retail real estate market has finally hit its stride.
“Buyers are circling properties with renewed confidence while sellers are holding tight, creating a dynamic that’s pushing prices up and compressing cap rates across the board,” the firm’s 2026 U.S. Retail Thematic Outlook and Investor Survey said. It found that 64% of investors plan to ramp up their retail acquisitions this year while only 48% expect to sell more. “That’s a gap that’s setting up one of the most competitive environments the sector has seen in years.”
JLL surveyed nearly 150 retail investors and found that 56% see the market as mid-cycle, meaning fundamentals are strong and rents and occupancy are climbing, but we have not hit the peak where pricing loses touch with reality.
“We’re seeing a level of investor conviction in retail that we haven’t witnessed in over a decade,” JLL Executive Managing Director and Co-Leader of the Retail Group Danny Finkle said. He noted the retail sector now commands 14% of U.S. sector investment–its highest share in 10 years–and trailing 12-month volume hit $62 billion, marking a 31% increase. “The fundamental driver is clear: there’s not much new supply coming, vacancies are low and consumers keep showing up,” he said. “That’s creating real landlord pricing power, and investors want in.”
One interesting trend: how investor strategies are evolving. A striking 68% of investors said they would rather chase higher yields in secondary or tertiary markets than pay premium prices in primary markets. JLL found that secondary and tertiary markets such as Charlotte, San Diego, Orlando, Denver and Kansas City are posting 4.3% year-over-year rental growth for grocery-anchored centers compared to 3.7% in primary markets.
More than 80% of investors include grocery-anchored retail in their plans. But the report said power centers have quietly become nearly as popular, with 73% of investors now targeting them. Cap rates between the two formats have compressed to just 50 basis points.
“The convergence in pricing between grocery-anchored and power centers reflects how investors have gotten more sophisticated in evaluating retail,” JLL Senior Managing Director and Co-Leader of the Retail Group Chris Angelone noted. “Both formats deliver what consumers need no matter what’s happening in the economy. Whether it’s Whole Foods or TJX Brands, these centers generate consistent foot traffic and sales that translate into steady returns.”
