Retail Leasing Trends in 2026: What Tenants and Landlords Must Prepare For
- gloryanng8
- Dec 23, 2025
- 4 min read
The retail market in Southern California is undergoing major transformation — not decline. As we approach 2026, shifting consumer behavior, economic stabilization, and the rise of experiential commerce have created new leasing patterns that both tenants and landlords must understand to remain competitive.
Retail spaces that adapt quickly to these trends will see shorter vacancy periods, stronger tenant performance, and higher long-term value. This guide breaks down the most important retail leasing trends for 2026 and how to position your property — or business — for success.
Trend 1 — Experience-Based Retail Continues to Outperform Traditional Stores
Consumers in 2026 prefer experiences over products. Retailers that combine service, engagement, or hands-on interaction consistently outperform traditional merchandise-only stores.
High-performing categories include:
✔ Boutique fitness studios
✔ Wellness concepts
✔ Beauty + skincare clinics
✔ Specialty food & drink
✔ Classes, workshops, and local engagement
✔ Medical retail (urgent care, dental, therapy clinics)
H2: Trend 2 — Smaller Retail Footprints Are Becoming More Popular
The era of oversized retail footprints is shrinking as businesses realize:
✔ Smaller, efficient layouts reduce rental costs
✔ Smart design improves customer flow
✔ Hybrid online/offline models require less storage
✔ Smaller spaces reduce staffing needs
Landlords offering flexible unit sizes see faster leasing.
Trend 3 — Prime Visibility and Foot Traffic Matter More Than Ever
Retailers in 2026 need:
✔ Strong signage
✔ Street-facing windows
✔ Easy parking access
✔ Walkable locations
✔ High-traffic intersections
Properties that lack visibility often sit vacant longer unless repositioned or renovated.
For best practices:👉 How Retail Leasing Strategies Are Evolving in Southern California
Trend 4 — TI (Tenant Improvement) Packages Are Now Expected
Tenants want spaces that are:
✔ Move-in ready
✔ Modernized
✔ Well-lit
✔ Clean and updated
Landlords who provide:
✔ Paint
✔ Flooring
✔ Modern storefronts
✔ ADA improvements
✔ HVAC upgrades
…can command higher rent and attract stronger tenants.
Trend 5 — Medical Retail Demand Is Surging
Medical retail continues to grow as providers expand into neighborhood centers.
High-demand categories include:
✔ Dental
✔ Imaging
✔ Dermatology
✔ Therapy & counseling
✔ Family medicine
Why medical retail dominates:
✔ Recession-resistant
✔ High insurance reimbursement
✔ draws consistent foot traffic
Trend 6 — Co-Retail & Shared Spaces Are Expanding
Shared retail spaces allow:
✔ Lower rent
✔ Collaborative environments
✔ Community-focused concepts
✔ Pop-up shops & rotating tenants
This model works well for boutique brands entering the market for the first time.
Trend 7 — Outdoor and Patio Space Adds Significant Value
Post-pandemic, customers still prefer outdoor seating for:
✔ Cafés
✔ Restaurants
✔ Juice bars
✔ Family-friendly businesses
Landlords with patio opportunities can attract top-tier lifestyle tenants.
Trend 8 — Retail in the South Bay Outperforms Other Regions
Cities like:
Torrance
Manhattan Beach
Redondo Beach
El Segundo
…continue to draw high-income consumers, leading to lower vacancy rates and premium retail demand.
Learn more:👉 Retail Leasing in the South Bay for 2026
Trend 9 — Mixed-Use Retail is Gaining Even More Traction
Retail spaces attached to:
✔ residential communities
✔ office campuses
✔ lifestyle plazas
…see stronger leasing velocity because of built-in customer bases.
Trend 10 — Tenant Retention Is Becoming a Priority
Retail turnover is expensive.
Landlords who want to improve ROI in 2026 are focusing on:
✔ Modernizing spaces
✔ Maintaining strong communication
✔ Offering renewal incentives
✔ Right-sizing TI packages
✔ Maintaining clean, attractive properties
Opportunities for Landlords in 2026
Retail landlords can capitalize on these trends by:
✔ Offering flexible lease terms
✔ Providing turnkey space options
✔ Enhancing storefront visibility
✔ Adding signage opportunities
✔ Upgrading lighting & landscaping
✔ Supporting strong tenant mixes
Risks Retailers Should Prepare For
Retail tenants must be aware of:
❗ Rising CAM fees
❗ Longer permitting timelines
❗ ADA compliance requirements
❗ Increasing TI costs
❗ The need for strong branding and signage
Learn about risk management:👉 Why Securing the Right Commercial Lease or Sale Can Be Riskier Than You Think
FAQs
1. What retail categories will grow the most in 2026?
Wellness, medical retail, boutique fitness, and specialty dining.
2. Are smaller retail spaces becoming more popular?
Yes — brands prefer efficient floor plans with lower operating costs.
3. What attracts tenants fastest in 2026?
Good visibility, updated interiors, signage, and parking convenience.
4. How important are TI packages?
Very important — tenants expect some level of build-out support.
5. What areas of Southern California have the strongest retail demand?
The South Bay, West LA, and certain areas of Orange County.
6. Is mixed-use retail more stable?
Yes — built-in consumer traffic increases long-term performance.
7. What causes retail vacancies to remain high?
Outdated spaces, limited visibility, lack of tenant mix, or difficult parking.
Prepare Your Retail Strategy for 2026 With RPM Commercial
Stay ahead of the evolving retail market. RPM Commercial helps landlords and tenants navigate leasing trends, optimize property performance, and secure long-term success.
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