Newmark: Retail space absorption, rents rise in Q4 2025
Available retail spaces continued to be absorbed in the final quarter of 2025.
That’s according to the 4Q25 U.S. Retail Market Conditions & Trends report from Newmark Research, which provides an in-depth analysis of the commercial real estate sector’s performance in the quarter.
At almost 7.4 million sq. ft. in retail absorption, the fourth quarter was healthy, according to Newmark, which it says is another sign of the retail market already absorbing the mass closures announced throughout 2024 and in early 2025, including Party City, Joann, Forever 21 and 99 Cent Only Stores, and more. Vacancy created by these closures in strong markets are being quickly backfilled.
Retail availability remained stable at 5.3% to close out 2025, as move-outs were in balance with move-ins, though the number is still below the average availability of 6.5%. On a year-over-year basis, availability in the quarter increased 30 basis points.
Retail leasing activity totaled 29.8 million sq. ft. for all U.S. centers and properties of 20,000 sq. ft. and higher. This is a slowdown from previous quarters and remains almost 15 million sq. ft. below the long-term average of 44.6 million sq. ft., or 33%.
Newmark cited several factors for this, most notably the lack of prime retail space. It also noted that over 191 million sq. ft. of obsolete or underperforming space has been demolished since the start of 2020.
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“Low deliveries, combined with a significant amount of demolition, have defended the retail real estate market against any harsh conditions it has faced, such as retailers struggling to adapt to multichannel operations or overall economic uncertainty for consumers,” said Newmark.
Additional insights from the Newmark report included the following:
- Rents for open-air neighborhood, community and strip centers rose 1.3% quarter over quarter according to Newmark, as three straight quarters of negative net absorption were finally interrupted with a positive quarter.
- On an indexed basis, retail sales per square foot of occupied space rose 4.2% year over year and 45% since the fourth quarter of 2019. Over the same period, average asking rents rose 0.2% year over year, but have increased 20% since the fourth quarter of 2019.
- Long-available retail space, or retail space on the market for 24 months or longer, remained a significant portion of total retail space available in the fourth quarter 2025, making up almost 47% of all retail space available.
The full Newmark report can be found here.
