Back in January, our team of retail advisors shared their thoughts on the retail real estate trajectory for 2026. Our team predicted a market defined by cautious consumer behavior, persistent but steady urban-to-suburban shifts, and local concepts stepping into the spotlight to drive growth.
Six months later, those forecasts have held up, and are actively shaping the leasing landscape across D.C., Maryland, and Virginia. Here is a look at what we got right, what’s holding steady, and how we are positioning our partners for the remainder of 2026.
The Era of the Local Concept
One of our biggest takeaways from early January was that regional and local operators would be the primary engine of new leasing activity. As households tighten their belts amid a selective spending environment, consumers are choosing to spend their discretionary dollars on authentic, community-driven experiences.
We see this validation playing out perfectly in real-time through strategic expansions and fresh concepts:
- Biryani Grill: Proving that local culinary favorites with deep roots in the community have the leverage to scale, this local gem continues its strategic expansion across the region, capturing the steady consumer demand for high-quality flavor profiles.
- Falcon & Fig: Our newest Mediterranean-inspired wine and tapas concept perfectly captures the “destination dining close to home” trend. Merging an elevated culinary experience with curated social environments, it highlights exactly why experience-driven neighborhood retail remains undefeated.
Health, Wellness, and Services Solidify Their Role
Health and wellness concepts, along with service-oriented retail, continue to expand their share of space. From boutique fitness to medical and personal care services, these uses are increasingly foundational to retail environments.
This trend underscores a structural shift in how retail space is utilized. Categories that provide essential, experiential, or routine services are outperforming, offering consistent traffic and long-term stability in a changing retail landscape. One example of this momentum in action:
- Fuze House: Coming soon to Georgetown Shops, this wellness-focused concept marks its first expansion beyond New York and Miami, highlighting the growing demand for health-driven brand in prime retail environments.
Suburban Strength and a Measured Urban Comeback
In our initial outlook, we noted a slight divergence between the submarkets, primarily with Maryland continuing to navigate the ripples of a shifting federal workforce and hybrid work cadences.
Suburban retail has maintained its position as the most stable and active segment of the market. Strong demographics, convenience, and evolving work patterns continue to support leasing activity, particularly among service-oriented and daily-needs tenants.
Urban markets, including Washington, D.C., are showing signs of improvement, but the recovery remains gradual. Hybrid work patterns are sustaining baseline activity, yet have not fully restored pre-pandemic foot traffic levels. As a result, urban retail performance is increasingly tied to location-specific fundamentals, meaning density, accessibility, and tenant mix matter more than ever.
The Roadmap for the Rest of 2026
As we push into the second half of the year, the macro-environment will continue to reward operators and landlords who focus on execution.
While the core themes of the 2026 outlook remain intact, several additional forces are gaining traction:
- Experience is expanding beyond dining. Entertainment-driven concepts, from family-focused venues to competitive social experiences, are rapidly backfilling larger vacancies and redefining anchor strategies.
- Leasing decisions are becoming more data-driven. Technology adoption, including AI-enabled tools, is beginning to influence how landlords evaluate tenants, optimize operations, and understand customer behavior.
- Second-generation space is creating opportunity. As some retailers exit, well-located vacancies are allowing stronger concepts to enter markets more quickly and cost-effectively.
The overarching theme for the rest of 2026 remains exactly what Susan Bourgeois noted at the start of the year: “It’s bumpy, but new doors are opening.” Navigating this terrain successfully comes down to having boots on the ground and real-time market data.
As the retail landscape continues to evolve, our team is here to help. Contact us to learn how our services can help you navigate the remainder of the year and uncover new opportunities.
