Orlando’s retail market entered Q1 2026 with strong momentum, as demand has accelerated sharply over the past year and continues to outpace supply. Net absorption reached roughly 540,000 square feet over the last 12 months, a significant rebound from prior losses, positioning the metro among the top-performing retail markets nationally. Leasing activity has strengthened too, rising more than 15% year over year, though tenant expansion is increasingly constrained by limited availability. With vacancy near historic lows at approximately 4.4%, competition for high-quality space remains intense, particularly in core corridors. While development activity is elevated, most projects are largely preleased, reinforcing a structurally undersupplied environment that continues to support moderately high rent growth and landlord-favorable conditions.

 

Key Findings

• Orlando’s retail investment market remains liquid, with Q1 2026 volume exceeding $500 million, as investors continue targeting necessity-based and well-located assets despite shifting capital conditions.
• Development remains constrained, with just 1.17 million SF underway, most preleased, limiting new supply and reinforcing a structurally undersupplied market amid elevated construction costs and financing challenges.
• Strong tenant demand and limited availability continue to drive leasing activity and rent growth, with rents up over 5% year over year, maintaining landlord leverage, particularly as space constraints limit large-format expansions.

 

Orlando Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 3.9%
• Households: 1,123,616
• Current Population: 3,000,909
• Median Household Income: $84,575

 

Rent

Orlando’s retail rent growth remains a defining strength, supported by tight availability and sustained tenant demand. Asking rents reached approximately $31/SF in Q1 2026, reflecting 5.4% year-over-year growth, well above the national average. Growth has been led by power centers and malls, while smaller formats have trailed modestly. Landlords maintain strong pricing power, though limited availability of large, high-quality spaces and rising operating costs are beginning to temper further upside, signaling a shift toward healthier rent growth.

 

Market Asking Rent Per SF

Source: CoStar Group, Inc.

 

Vacancy

Vacancy remains tight, reflecting sustained tenant demand across formats despite slight recent fluctuation. Vacancy stood at approximately 3.9% in Q1 2026, up modestly from late 2025 but still near historic lows. Rates have compressed most in power centers, strip centers, and malls. A key constraint is the limited supply of modern space, with less than 5% of vacant inventory delivered in the past five years, restricting options for expanding tenants. As a result, competition continues to concentrate in well-located, high-quality centers.

 

Vacancy Rate

Source: CoStar Group, Inc.

 

Construction

The development pipeline remains constrained, limiting supply despite strong tenant demand. Approximately 1.17 million square feet was under construction in Q1 2026, representing less than 1% of existing inventory and marking a continued decline from recent peaks. Much of the current pipeline is already preleased, leaving minimal new space available to the market. Elevated construction and insurance costs, combined with financing challenges, continue to restrict speculative development, particularly for small-shop space.

 

SF Under Construction

Source: CoStar Group, Inc.

 

 Sales

Retail Investment in the metro remains active, supported by strong population growth and steady property fundamentals. Sales volume reached approximately $523 million in Q1 2026, reflecting continued deal flow and a modest uptick in pricing, with average sale prices rising to about $284 per square foot. Over the past year, activity has been concentrated in freestanding assets and neighborhood centers, which continue to attract investors seeking stable, necessity-based income streams. While larger transactions remain limited, liquidity in smaller deal sizes persists. Notable transactions ranged from roughly $175 to over $400 per square foot, underscoring sustained pricing strength across asset types. Overall, investor demand remains resilient, with capital targeting well-located assets despite evolving economic conditions and tighter capital markets.

 

Sales Volume & Market Sale Price Per SF

Source: CoStar Group, Inc.

 

By the Numbers

Q1 2026 | Source: CoStar Group, Inc.

• Sales Volume: $523M
• Cap Rate: 6.7%
• Price Per SF: $284
• Vacancy Rate: 3.9%
• Rent Growth: 5.4%
• Asking Rent Per SF: $31.19
• SF Under Construction: 1.2M
• SF Delivered: (58.3K)
• SF Absorbed: (202K)