A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox. The U.S. retail market started 2026 on relatively healthy footing, and investors, especially institutional investors, are starting to pay more attention. Retail appears to be moving from a story of recovery to one of scarcity. More stores closed or downsized than opened or expanded during the first quarter, according to a report from JLL, but vacancies are still low at just 4.4%. That is because there has been very little new construction in the sector. Retail also offers much better yields than other commercial real estate sectors. And that’s why investors are returning, with transaction volumes reaching over $15 billion during the first quarter, an increase of 5% compared with Q1 2025, according to the report. It was the highest first-quarter transaction volume since 2023. “The alpha wolves are back, and they are waking up hungry,” said Paul Kurzawa, president and incoming CEO of Centennial, a retail owner and operator. “The rebound in equity and debt market fundamentals is fueling the search for strong double-digit returns over short- to mid-term holds with spreads of 150 to 200 bps that outperform the market indexes. Those types of returns are now achievable, but only in the right situations.” Kurzawa, who oversees a 25 million-square-foot portfolio across 18 states, said the real shift isn’t just that capital is retur …
