Daytona Beach’s retail market entered 2026 with generally stable fundamentals, though momentum has slowed compared to prior years. Vacancy has increased to approximately 4.4%-4.5%, reflecting a modest softening in demand, while net absorption turned negative over the past 12 months. This marks a notable shift from the positive absorption seen a year ago and signals a more cautious tenant environment. Despite this slowdown, the market remains fundamentally healthy.

 

Population growth, in-migration, and a resilient tourism sector continue to underpin retail demand. Additionally, the limited availability of high-quality retail space, particularly for larger-format tenants, has helped prevent more significant vacancy expansion. Even with leasing activity becoming more selective, these underlying demand drivers should continue to support overall market stability.

 

Key Findings

• Selective Leasing Demand: Daytona Beach continues to attract a mix of necessity-based, discount, and experiential tenants, with recent larger leases from users like Aldi, Sprouts, HomeGoods, and O’Reilly Auto Parts driving leasing activity forward.
• Demand Drivers: Location advantage and relative affordability support long-term retail demand, while in-migration, population growth, and a resilient tourism base drive consumer spending and retailer interest.
• Private Capital Remains Active: Investment sales remain driven, despite a higher-cost environment. Private buyers continue targeting smaller, lower-risk retail assets, especially freestanding properties, due to stable fundamentals and demand.

 

Daytona Beach Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 4.5%
• Current Population: 751,379
• Households: 314,449
• Median Household Income: $76,260

 

Rents

Rent continues to post modest but steady growth, with asking rents averaging about $20.25 per square foot and annual growth around 2.0%. While rent gains have cooled from the stronger increases seen in recent years, pricing has remained stable due to limited new supply and continued consumer demand. Well-located centers and higher-quality retail product continue to achieve the strongest rent levels, particularly where space remains tight. Overall, the market continues to support rent growth despite more measured leasing conditions.

 

Market Asking Rent Per SF

Source: CoStar Group, Inc.

 

Vacancy

Rising to roughly 4.4%-4.5%, vacancy rates are reflecting softer leasing demand and negative absorption over the past year. Although this marks a noticeable increase from the tighter conditions seen previously, overall vacancy remains relatively healthy and still points to a stable retail market. One of the main reasons vacancy has not climbed further is the limited availability of high-quality space, particularly in strong retail corridors and centers that can accommodate larger-format tenants. That lack of quality supply has helped keep the market from loosening more materially, even as tenant demand has become more selective.

 

Vacancy Rate

Source: CoStar Group, Inc.

 

Construction

Activity remains limited, with only about 67,000 square feet currently underway in the market. New development has slowed as higher interest rates, elevated construction costs, and rising insurance expenses continue to pressure project feasibility, particularly in coastal locations. As a result, the retail pipeline remains thin and speculative development has largely stalled. That slowdown is helping prevent oversupply, which in turn is supporting rent stability and keeping overall market fundamentals relatively balanced.

 

SF Under Construction

Source: CoStar Group, Inc.

 

 Sales

Investment activity in Daytona Beach retail remains solid, with trailing 12-month sales volume reaching approximately $269 million, in line with long-term averages. The market continues to be driven primarily by private capital and smaller deal sizes, with the average transaction around $1.8 million, and most trades closing below $2 million, reflecting demand for stabilized, lower-risk assets.

 

Pricing has continued to trend upward, with average pricing around $186-$190/SF, while cap rates have remained relatively stable in the 6.6%-7.7% range. Despite some bid-ask spread challenges, buyers and sellers are still finding alignment, particularly for income-producing properties, while freestanding retail assets continue to account for a significant share of transaction volume.

 

Sales Volume

Source: CoStar Group, Inc.

 

By the Numbers

Q1 2026 | Source: CoStar Group, Inc.

• Sales Volume: $34.1M
• Price Per SF: $189
• Cap Rate: 7.7%
• Vacancy Rate: 4.5%
• Rent Growth: 2.1%
• Asking Rent Per SF: $20.25
• SF Under Construction: 67.7K
• SF Delivered: 57.2K
• SF Absorbed: (6K)