Retail is a kind of good news/bad news story right now. The good news is that retail is going gangbusters for most types of stores, but rents are rising. The bad news is there's barely enough space to meet retail demand, and rents are rising. Whether this news is good or bad for you depends on whether you're a store owner or a landlord.

The gap between demand for store space and new supply is stunning, JLL's report on the U.S. retail outlook for 2Q 2023 reveals. The overall average occupancy for retail centers across the country is 95.4%, while development is less than 0.3% of total inventory. Indeed, net absorption increased 12.6% quarter-over-quarter to 10.8 million square feet – but deliveries fell 5.1% in the same period. Just 11.9 million SF started construction in 1Q 2023 – the lowest level since 2005, according to JLL.

"Availability – the amount of space available for lease, regardless of whether or not it is vacant – within non-mall multi-tenant retail centers dropped to 7.5% in June, a precipitous drop from 2020," JLL stated. Spaces less than 5,000 SF have seen the highest demand, largely thanks to quick-service restaurant openings. However, spaces over 25,000 SF also show less availability. And this year, store openings are running well ahead of closings.