U.S. retail construction starts fall to lowest since at least 2016, CoStar says
XLRE•U.S. retail construction starts fell to 7.7 million square feet in Q3 2026, the lowest quarterly total since at least 2016. Space under construction declined to 58.3 million square feet, about 4% below its 10-year average.
1. Construction pipeline shrinks
Retail construction starts fell to 7.7 million square feet in Q3 2026, the lowest quarterly total since at least 2016. Space under construction declined to 58.3 million square feet from 60.6 million in Q2, roughly 4% below its 10-year average.
2. Costs limit development
Elevated development and financing costs pushed required rents above prevailing market levels for many retail formats, limiting new projects. Dallas-Fort Worth, Houston and Austin accounted for 15.5 million square feet under construction, nearly 27% of the national pipeline.
