Investment in U.S. retail surpassed historical averages in the first half of this year, with properties being leased quickly and construction starts stumbling.

Investment volumes surged 23% year-over-year to $28.5B in the first half of the year, exceeding the long-term historical average of $27.7B, according to JLL’s Retail Market Dynamics report.

That $28.5B figure is well below the most recent peak of H1 2022, when sales volume totaled more than $40B, but up compared to the first halves of 2023 and 2024.

While sales of retail properties were on the rise, construction of new retail struggled. Construction starts in the first two quarters of the year were down 50% to 4.9M SF.

“Much of what is available was built in the 20th century and of unexceptional quality,” the report’s authors wrote.

With new space hard to come by, retailers looking to expand have been finding their new location among existing retail space, which is getting snapped up rapidly.

Tenants signed new leases within seven months of the previous store’s closure, the shortest lag period in more than 20 years, according to the report.

Development activity won’t pick up until the economics of building speculatively even out, according to the report. As it stands, the costs associated with constructing new space are greater than the rents a finished space can capture.

Vacancies are steady at 4.3% nationwide, and the roughly 6,600 announced openings in the period surpassed the 5,600 closings. The report notes that openings occurred largely in spaces 10K SF or smaller, while closures were mostly between 10K SF and 50K SF.