SOUTHEAST U.S. RETAIL MARKET REPORT – Q1 2026

The Southeast U.S. retail market entered Q1 2026 with the strongest aggregate fundamentals among the five U.S. retail regions tracked in this institutional research series. Aggregate net absorption across the five primary Southeast markets, Atlanta, Miami, Charlotte, Nashville, and Raleigh-Durham, registered positive for the eighth consecutive quarter, driven by grocery-anchored and necessity-anchored absorption that institutional research consistently characterized as exceptional relative to national benchmarks. Direct vacancy across the Southeast aggregate held in the low single digits for grocery-anchored and necessity-anchored centers, with mixed-use trophy registering single-digit vacancy in the strongest submarkets and Class B regional mall inventory holding above twenty percent across most metros as the secular reset toward mixed-use repositioning continued.

Miami remained the standout performer across multiple retail subsectors, with Bal Harbour Shops, Brickell City Centre, Miami Design District, and Aventura Mall registering positive absorption and asking rent growth that institutional tracking placed among the strongest in the United States. Latin American capital flows, financial services relocations from New York and Connecticut driving luxury and necessity-anchored household formation, and tourism-driven high-street demand sustained the Brickell-Downtown-Design District axis through Q1. Suburban Miami necessity-anchored retail benefited from spillover effects, while older inventory in north Dade and Doral continued to face pricing pressure consistent with the national commodity reset on unanchored strip product. The Bal Harbour, Brickell City Centre, and Miami Design District trophy luxury submarkets continued to clear at materially higher pricing than peer U.S. luxury retail destinations, with international luxury brands sustaining flagship strategies through the post-pandemic cycle.

Atlanta registered notable strength across mixed-use trophy and grocery-anchored subsectors, with mixed-use placemaking destinations including Ponce City Market, Atlantic Station, The Battery, Avalon, and Halcyon sustaining the placemaking thesis: tenants and operators willing to pay materially above-market rents for amenity-rich, transit-accessible, mixed-use environments aligned with post-pandemic consumer behavior. Buckhead retail and SouthPark-comparable trophy product in Atlanta sustained positive absorption, with luxury, contemporary, and experiential retail tenants representing the dominant demand cohort. Atlanta's mall-to-mixed-use conversion pipeline expanded materially through 2025, with several Class B regional mall sites advancing through entitlement and financial close stages during Q1 2026 as Georgia's adaptive reuse tax credit framework and Atlanta city-level density bonuses combined to support conversion economics.

Charlotte's Q1 2026 retail dynamics reflected the financial services and corporate headquarters demand thesis that had sustained the broader Charlotte market through the post-pandemic cycle, expressed through retail in the SouthPark trophy luxury corridor and grocery-anchored absorption in suburban Ballantyne and University City trade areas. SouthPark Mall, Phillips Place, and adjacent trophy retail registered positive absorption and asking rent growth, with luxury, contemporary, and experiential tenants representing the dominant demand cohort. Grocery-anchored centers in Charlotte's suburban submarkets sustained positive absorption through Q1 2026, with Publix, Harris Teeter, and Whole Foods anchor expansions continuing through 2025 and into Q1.

Nashville's retail market in Q1 2026 reflected the most balanced fundamentals among Southeast trophy mixed-use submarkets. Downtown Nashville and the Gulch sustained positive absorption through 2025 and into Q1, with experiential retail, restaurant, and entertainment tenants representing the dominant demand cohort. The Gulch and 5th + Broadway mixed-use deliveries sustained the placemaking thesis through Q1 2026. Suburban Cool Springs, Brentwood, and Franklin grocery-anchored centers registered modestly positive absorption, while older suburban inventory remained challenged. The Tanger Outlets Nashville and adjacent outlet center retail sustained tourism-driven absorption through Q1.

The Raleigh-Durham Research Triangle continued to absorb the substantial grocery-anchored supply pipeline delivered over 2023-2025, with Publix, Wegmans, Whole Foods, and Harris Teeter anchor commitments sustaining new development feasibility. Q1 2026 marked the eighth consecutive quarter where grocery-anchored absorption modestly outpaced delivery additions, signaling continued supply digestion across the Research Triangle's primary trade areas. University-adjacent submarkets in Chapel Hill and downtown Raleigh registered the strongest specialty and lifestyle retail demand, while older suburban Cary and Morrisville commodity inventory continued the national Class B and unanchored strip reset trajectory.

Capital markets activity in Q1 2026 across the Southeast retail region clarified a pattern that had been forming through 2025: institutional capital was again willing to underwrite grocery-anchored, necessity-anchored, and mixed-use trophy retail at spreads materially tighter than prevailing 2024 levels, while Class B regional mall and older unanchored strip product continued to clear at distressed pricing through note sales, REO dispositions, and mall-to-mixed-use conversion or big-box repositioning workouts. Overall CMBS retail special servicing rates remained elevated against historical norms but showed early signs of stabilization as 2023-2024 vintage modifications worked through the system. Life insurance company allocations to Southeast grocery-anchored and necessity-anchored retail expanded modestly. Bridge lending on repositioning, lease-up, big-box repositioning, and mall-to-mixed-use conversion product cleared at spreads consistent with broader institutional research benchmarks for stabilizing retail collateral.

The Q1 2026 Southeast retail report is intended for institutional sponsors, family office principals, REIT operators, life insurance company portfolio managers, CMBS investors, and developer-sponsors evaluating financing strategy across Southeast retail assets. The capital markets framing emphasizes Bridge, CMBS, and LifeCo execution as the dominant institutional debt pillars, with Fannie Mae DUS and Freddie Mac Optigo Agency Execution available for qualifying mixed-use retail-residential executions and SBA 7(a) and 504 financing available for owner-user retail acquisitions meeting fifty-one percent owner-occupancy thresholds under the June 2025 SBA Standard Operating Procedure.

The Southeast retail region's Q1 2026 fundamentals reflected the strongest aggregate position among U.S. retail geographies tracked in this series. Direct vacancy across the five primary Southeast markets averaged in the high single digits to low teens range for grocery-anchored and necessity-anchored centers, materially below national retail aggregates and West Coast and Northeast gateway comparables for similar product types. Mixed-use trophy and high-street retail vacancy in Miami, Atlanta, and Nashville prime submarkets registered in the single digits, while Class B regional mall and older unanchored strip vacancy held materially above twenty percent across most secondary metros as the secular reset continued. Trophy and Class A+ asking rent growth registered positive across all five primary metros for grocery-anchored, mixed-use trophy, and high-street luxury product, while Class B regional mall and older unanchored strip continued the national reset pattern with modestly negative asking rent trajectories.

Atlanta

Atlanta's Q1 2026 retail fundamentals continued the multi-quarter mixed-use placemaking expansion that had defined the market through 2024-2025. Ponce City Market, Atlantic Station, The Battery Atlanta, Avalon, and Halcyon sustained the region's strongest mixed-use trophy leasing momentum, with experiential retail, restaurant, contemporary fashion, and consumer goods tenants representing the dominant demand pool. Buckhead retail along Peachtree Road sustained luxury and contemporary leasing momentum, with Lenox Square and Phipps Plaza anchoring the trophy luxury corridor. Tenants willing to pay materially above-market rents for amenity-rich, transit-accessible, mixed-use environments sustained the placemaking thesis through Q1 2026. Atlanta's grocery-anchored retail subsector registered positive absorption across the Buckhead, Vinings, Roswell, Alpharetta, and Sandy Springs trade areas, with Kroger, Publix, Whole Foods, and Sprouts anchor commitments sustaining new development feasibility through 2025 and into Q1.

Suburban Atlanta commodity unanchored strip center inventory and Class B regional mall product continued the national reset. North Point Mall, Gwinnett Place Mall, and several adjacent suburban Class B regional mall properties advanced through note sales, REO dispositions, or mall-to-mixed-use conversion feasibility studies during 2025 and into Q1 2026. Atlanta's mall-to-mixed-use conversion pipeline expanded materially through 2025, with several Buckhead-adjacent and suburban Atlanta mall sites reaching financial close in Q4 2025 and Q1 2026. The state of Georgia's adaptive reuse tax credit framework, paired with Atlanta city-level density bonuses for conversion projects and federal Opportunity Zone overlay benefits in select trade areas, created a meaningfully more favorable conversion economics environment than prevailed in most U.S. markets. Big-box repositioning activity expanded through Q1 2026, with vacant former big-box anchors being converted to medical office, fitness, entertainment, and last-mile industrial uses across multiple Atlanta submarkets.

Miami

Miami's Q1 2026 retail fundamentals reflected the strongest trophy and high-street luxury market dynamics among major U.S. metros. Bal Harbour Shops, Miami Design District, Brickell City Centre, Aventura Mall, and Lincoln Road registered positive absorption and double-digit asking rent growth on a trailing-twelve-month basis. Bal Harbour Shops, anchored by Saks Fifth Avenue and Neiman Marcus, sustained continued positive absorption with international luxury brand strategies from Chanel, Prada, Gucci, Tiffany & Co., Bulgari, and adjacent luxury houses anchoring the trophy luxury thesis. The Miami Design District sustained continued positive absorption with Hermès, Louis Vuitton, Cartier, Dior, Fendi, Valentino, Bulgari, and adjacent international luxury brand flagship strategies anchoring the Northeast 40th Street corridor through Q1 2026, with several brands expanding footprints and reformatting flagship presentations. Brickell City Centre, the Aventura Mall trophy luxury expansion, and adjacent trophy developments delivered through 2024-2025 stabilized faster than institutional research had projected, with luxury, contemporary, hospitality-adjacent food and beverage, and Latin American gateway-driven tenants representing the dominant demand cohort. Coral Gables Miracle Mile and Coconut Grove CocoWalk trophy product sustained positive absorption, while suburban Doral and north Dade commodity unanchored strip inventory continued the national reset trajectory.

Miami's retail demand profile continued reflecting structural drivers that distinguished the market from broader U.S. retail fundamentals: Latin American capital flows seeking U.S. dollar denominated luxury and necessity-anchored retail platforms, financial services relocations from New York and Connecticut continuing into 2025 and 2026 driving high-income household formation and rooftop demand for luxury and necessity-anchored retail, and tourism-driven hospitality-adjacent food, beverage, and experiential retail demand tied to ongoing Latin American gateway tourism and conference activity. The Miami luxury trophy thesis sustained meaningfully higher pricing than peer Sun Belt trophy retail submarkets, with Bal Harbour and Design District trophy asking rents clearing well above Atlanta Buckhead and Charlotte SouthPark comparables. Necessity-anchored retail in Miami's suburban Kendall, Pinecrest, Palmetto Bay, and South Miami trade areas sustained positive absorption through Q1 2026, with Publix, Whole Foods, Sprouts, and Fresh Market anchor commitments supporting new development feasibility.

Charlotte

Charlotte's Q1 2026 retail fundamentals reflected the financial services and corporate headquarters demand thesis that had sustained the broader Charlotte market through the post-pandemic cycle, expressed through retail in the SouthPark trophy luxury corridor, Uptown retail, and grocery-anchored absorption in suburban Ballantyne, Lake Norman, and University City trade areas. SouthPark Mall, Phillips Place, and adjacent trophy retail along Sharon Road registered positive absorption and asking rent growth, with luxury, contemporary, and experiential retail tenants representing the dominant institutional tenant cohort. Trophy and Class A+ asking rents registered modest positive growth, while Class B SouthPark-adjacent and South End trophy mixed-use product sustained occupancy through 2025 deliveries that began stabilizing in Q1 2026. South End's mixed-use trophy reset continued as a meaningfully bifurcated story: newer mixed-use trophy product absorbed positive demand from experiential retail, restaurant, and contemporary fashion tenants, while older 1990s-2000s commodity strip inventory faced ongoing occupancy pressure.

Suburban Ballantyne, University City, and Lake Norman grocery-anchored and necessity-anchored centers registered positive absorption through Q1 2026, with Publix, Harris Teeter, Whole Foods, and Wegmans anchor commitments sustaining new development feasibility. Several Ballantyne and University City unanchored strip center conversions to alternative uses, including medical office and necessity-anchored repositioning, advanced through 2025 and into Q1 2026. Charlotte's mall-to-mixed-use conversion pipeline remained meaningfully less developed than Atlanta's, with conversion economics generally requiring lower acquisition basis to clear feasibility than in trophy-adjacent Atlanta submarkets. North Carolina's adaptive reuse environment continued supporting conversion economics on suitable suburban Class B regional mall and unanchored strip assets through 2025 and Q1 2026, though policy framework activation remained more selective than Georgia's.

Nashville

Nashville's Q1 2026 retail fundamentals reflected the most balanced trophy mixed-use and grocery-anchored leasing dynamics among Southeast metros. Downtown Nashville, the Gulch, and 5th + Broadway sustained positive absorption through 2025 and into Q1, with experiential retail, restaurant, music industry merchandise, and tourism-driven contemporary retail tenants representing the diversified demand pool. Asking rent growth on mixed-use trophy product registered positive through 2025 and modestly positive into Q1 2026. The 5th + Broadway, Nashville Yards, and adjacent trophy mixed-use deliveries sustained the placemaking thesis: tenants and operators willing to pay above-market rents for amenity-rich, transit-accessible environments aligned with tourism-driven and entertainment-driven consumer behavior.

Cool Springs and Brentwood suburban submarkets registered modestly positive absorption on smaller grocery-anchored and necessity-anchored centers, primarily anchored by Publix, Kroger, and Whole Foods commitments. The Tanger Outlets Nashville and Opry Mills outlet and entertainment retail sustained tourism-driven absorption through Q1 2026. Older suburban Nashville inventory in Maryland Farms, Brentwood South, and Franklin commodity strip product continued the national reset trajectory. Nashville's mall-to-mixed-use conversion pipeline remained modest relative to Atlanta and Miami, with most conversion activity concentrated in older downtown commodity inventory and suburban Class B regional mall feasibility studies that had not yet advanced through financial close.

Raleigh-Durham (Research Triangle)

The Raleigh-Durham Research Triangle Q1 2026 retail fundamentals reflected the most distinctive demand profile among Southeast markets. Grocery-anchored absorption modestly outpaced delivery additions for the eighth consecutive quarter, signaling sustained supply digestion that institutional research projected to continue through 2026. The Research Triangle's Streets at Southpoint trophy regional mall, Crabtree Valley Mall, and the downtown Raleigh and Chapel Hill trophy mixed-use submarkets sustained the grocery-anchored and lifestyle retail demand thesis through 2025 and into Q1 2026. Asking rents on grocery-anchored, mixed-use trophy, and university-adjacent specialty retail registered positive growth, while traditional unanchored strip retail in downtown Raleigh and downtown Durham held modestly positive.

Suburban Cary, Morrisville, and Apex grocery-anchored and necessity-anchored centers continued to absorb the substantial supply pipeline delivered over 2023-2025, with Publix, Wegmans, Whole Foods, and Harris Teeter anchor commitments sustaining new development feasibility. Several suburban Cary unanchored strip center conversions to medical office and necessity-anchored repositioning advanced through 2025, with North Carolina's adaptive reuse environment supporting conversion economics on suitable assets. The Research Triangle's grocery-anchored supply pipeline, which had been the dominant Southeast retail story through 2023-2025, transitioned in Q1 2026 from delivery-heavy to digestion-focused, with multiple stabilizing 2024 deliveries reaching projected lease-up trajectories.

Georgia — Atlanta

Atlanta's state-level Q1 2026 retail dynamics reflected the most pronounced mixed-use trophy and grocery-anchored expansion among Southeast metros. Direct vacancy in Midtown and Buckhead trophy mixed-use product compressed into the single digits for the highest-quality trophy inventory, while Perimeter and North Fulton older unanchored strip and Class B regional mall vacancy held above twenty-five percent for older 1980s-1990s product. Mixed-use trophy and grocery-anchored absorption compressed vacancy by meaningful margins through 2025 and into Q1 2026, with several major leases rolling at trophy submarkets. Atlanta's mall-to-mixed-use conversion pipeline expanded materially through 2025, with city-level density bonuses, state-level adaptive reuse tax credits, and federal Opportunity Zone overlay benefits combining to support conversion economics on suitable assets. The Class B regional mall and older unanchored strip sectors continued the national reset, with several Atlanta-adjacent older properties advancing through note sale, REO disposition, or conversion feasibility processes during Q1 2026. Big-box repositioning activity expanded as vacant former Bed Bath & Beyond, Toys R Us, and other big-box anchors were converted to medical office, fitness, entertainment, and last-mile industrial uses.

Florida — Miami

Miami's state-level Q1 2026 retail dynamics sustained the strongest trophy luxury and necessity-anchored retail position among major U.S. metros. Bal Harbour, Brickell, and Miami Design District trophy direct vacancy held in the low single digits for the highest-quality trophy luxury inventory, with asking rents clearing materially above peer Sun Belt and U.S. luxury retail submarkets. The Brickell City Centre, Aventura Mall trophy expansion, and adjacent recent trophy deliveries stabilized faster than institutional research had projected. Coral Gables sustained trophy fundamentals, while Coconut Grove and South Miami trophy mixed-use product held positive absorption through Q1 2026. Doral, north Dade, and Homestead commodity unanchored strip inventory continued the national reset, with several suburban Miami big-box repositioning conversions advancing through 2025 and Q1 2026. Florida's state-level absence of corporate income tax and personal income tax, paired with Miami-Dade county-level economic development incentives, sustained the corporate relocation thesis that had driven Miami household formation and retail demand through the post-pandemic cycle.

Florida — Tampa-St. Petersburg and Orlando

Tampa-St. Petersburg and Orlando represented meaningful secondary Florida retail markets in Q1 2026. Tampa's Hyde Park Village, International Plaza, and Westshore mixed-use trophy submarkets sustained positive absorption through 2025 and into Q1, with luxury, contemporary, experiential retail, and tourism-driven food and beverage tenants representing the dominant demand cohort. Orlando's retail market reflected a more bifurcated story, with The Mall at Millenia trophy luxury, Disney Springs tourism-driven retail, and the Lake Mary corporate-adjacent grocery-anchored submarkets sustaining positive absorption while suburban Lake Buena Vista and older central Orlando commodity unanchored strip inventory continued the national reset. Both metros benefited from Florida's broader Sun Belt corporate inflow narrative, with population growth and tourism-driven demand flows continuing into 2025-2026 institutional research projections. The Tanger Outlets at Sunrise and Premium Outlets Orlando International sustained tourism-driven outlet center absorption.

North Carolina — Charlotte

Charlotte's state-level Q1 2026 retail dynamics reflected the financial services and corporate headquarters concentration that had distinguished the broader Charlotte market through the post-pandemic cycle. SouthPark Mall, Phillips Place, and adjacent Sharon Road trophy retail direct vacancy held in the mid-single digits for the highest-quality Class A+ trophy luxury inventory, with luxury, contemporary, and experiential retail tenants representing the dominant tenant cohort. South End's bifurcated mixed-use trophy story sustained newer mixed-use trophy absorption from experiential retail and contemporary fashion while older commodity strip inventory faced occupancy pressure. North Carolina's state-level adaptive reuse environment supported conversion economics on suitable suburban Ballantyne and University City assets through 2025 and Q1 2026, though conversion pipeline scale remained meaningfully below Georgia's.

North Carolina — Raleigh-Durham

The Research Triangle's state-level Q1 2026 dynamics reflected the most distinctive demand profile among Southeast retail metros. Grocery-anchored direct vacancy on Class A trophy product compressed into the mid-single digits for the highest-quality assets, while older unanchored strip retail in suburban Cary and Morrisville sustained modest occupancy pressure. The Streets at Southpoint and Crabtree Valley Mall sustained positive absorption through 2025 deliveries that began stabilizing in Q1 2026. Chapel Hill university-adjacent specialty retail submarkets registered positive absorption from university and pharmaceutical research-related demand. The North Carolina Biotechnology Center and the state's life sciences economic development framework continued supporting the Research Triangle's grocery-anchored and necessity-anchored absorption through Q1 2026 as high-income pharmaceutical research, healthcare, and university employment household formation sustained rooftop demand.

Tennessee — Nashville

Nashville's state-level Q1 2026 retail dynamics reflected the most balanced mixed-use trophy and grocery-anchored fundamentals among Southeast metros. Downtown Nashville and the Gulch mixed-use trophy direct vacancy held in the low to mid single digits for the highest-quality trophy mixed-use inventory, with experiential retail, restaurant, music industry merchandise, and tourism-driven contemporary retail tenants sustaining diversified absorption. The 5th + Broadway and Nashville Yards trophy mixed-use submarkets held positive absorption through Q1 2026, with mixed-use placemaking developments sustaining above-market trophy pricing. Cool Springs and Brentwood suburban Class A grocery-anchored and necessity-anchored product registered modestly positive absorption, primarily anchored by Publix, Kroger, and Whole Foods commitments. Tennessee's state-level absence of personal income tax sustained the household formation thesis that had driven Nashville retail demand through the post-pandemic cycle.

South Carolina, Florida Panhandle, and Secondary Southeast Markets

Charleston, Greenville-Spartanburg, Birmingham, the Florida Panhandle, and Jacksonville represented meaningful secondary Southeast retail markets in Q1 2026. Charleston's King Street, Mount Pleasant Towne Centre, and Daniel Island grocery-anchored submarkets sustained positive absorption on smaller mixed-use trophy and necessity-anchored product, primarily anchored by Publix, Whole Foods, and Harris Teeter commitments and complemented by tourism-driven specialty retail along King Street. Greenville-Spartanburg benefited from continued manufacturing and corporate headquarters expansion tied to BMW, Michelin, and adjacent industrial economic development, with Haywood Mall trophy and downtown Greenville Main Street specialty retail sustaining absorption. Birmingham's downtown trophy retail sustained modest absorption from corporate, healthcare, and financial services-driven household formation, with The Summit and adjacent trophy lifestyle centers anchoring the market. The Florida Panhandle and Jacksonville reflected smaller-scale Sun Belt corporate inflow dynamics, with St. Johns Town Center trophy and grocery-anchored absorption sustaining the Jacksonville market and Pier Park outlet and lifestyle retail sustaining tourism-driven absorption in the Panhandle.

Capital markets activity across the Southeast retail sector in Q1 2026 reflected a meaningful institutional re-engagement with grocery-anchored, necessity-anchored, and mixed-use trophy retail collateral, paired with continued price discovery on Class B regional mall and older unanchored strip product. CMBS issuance for Southeast retail collateral remained selective and tilted heavily toward grocery-anchored mixed-use, necessity-anchored centers, mixed-use trophy, and high-street luxury product, with several Q1 2026 conduit pools including meaningful allocations to Sun Belt grocery-anchored and necessity-anchored Southeast retail. Conduit spreads on stabilized trophy and grocery-anchored Southeast retail tightened modestly versus 2024 comparables, while spreads on Class B regional mall and older unanchored strip collateral continued to clear at materially wider levels reflecting the secular reset.

Life insurance company allocations to long-duration Southeast trophy and grocery-anchored retail expanded modestly versus 2024 lows. LifeCo permanent financing executed during Q1 2026 across Southeast trophy mixed-use, high-street luxury, and stabilized grocery-anchored product cleared at spreads consistent with broader institutional research benchmarks for the highest-quality stabilized retail collateral. Several Southeast Q1 2026 LifeCo executions included Miami Brickell and Design District trophy luxury, Atlanta Buckhead trophy mixed-use, Charlotte SouthPark trophy luxury, and stabilized Publix-anchored and Kroger-anchored grocery-anchored centers across the Carolinas and Georgia. For institutional sponsors evaluating long-duration permanent financing on highest-quality stabilized retail trophy product, the LifeCo Loan Program provides the long-duration fixed-rate institutional execution pillar.

Bridge debt activity in the Southeast retail sector expanded materially through Q1 2026, with bridge lenders re-engaging on grocery-anchored stabilization, big-box repositioning, mall-to-mixed-use conversion-ready acquisitions, and value-add necessity-anchored repositioning at spreads tightening into the second half of Q1. Bridge execution on Southeast retail clearing trophy and grocery-anchored stabilization business plans cleared at spreads materially tighter than 2024 comparables, reflecting the institutional re-engagement with the trophy thesis. For institutional sponsors evaluating Southeast retail repositioning, big-box repositioning, mall-to-mixed-use conversion-ready, or grocery-anchored stabilization business plans, the Bridge Loan Program provides the institutional bridge debt execution pillar that connects acquisition through stabilization.

CMBS conduit execution on stabilized Southeast trophy mixed-use, grocery-anchored, and necessity-anchored retail registered the strongest aggregate volume since early 2022 during Q1 2026, with several conduit pools including meaningful Southeast retail allocations and spreads on trophy collateral tightening modestly through the quarter. For institutional sponsors evaluating CMBS execution on stabilized Southeast retail trophy, grocery-anchored, or necessity-anchored product, the CMBS Loan Program provides the conduit execution pillar for stabilized trophy, grocery-anchored, and necessity-anchored Southeast retail collateral.

Fannie Mae DUS and Freddie Mac Optigo Agency Execution remained available for qualifying Southeast retail-residential mixed-use executions where the residential component dominated the income profile. Several Q1 2026 Atlanta, Miami, Nashville, and Raleigh-Durham mixed-use deliveries qualified for Agency Execution on the residential component with retail at the ground level supporting the mixed-use placemaking thesis. For institutional sponsors evaluating mixed-use retail-residential Agency Execution, Agency mixed-use pathways provide qualifying executions on suitable mixed-use product. Conditional SBA 7(a), SBA 7(a) 100% commercial real estate, and SBA 504 financing remained available for qualified owner-user retail acquisitions meeting fifty-one percent owner-occupancy thresholds under the June 2025 SBA Standard Operating Procedure, with several Q1 2026 Southeast owner-user retail acquisitions executing through SBA 7(a) and SBA 504 pathways for single-tenant net-lease, owner-user franchise, and small-format owner-user retail strip product.

Private capital and structured debt activity across Southeast retail in Q1 2026 reflected meaningful institutional re-engagement on opportunistic and complex stack situations, including mezzanine and preferred equity placements for Southeast mall-to-mixed-use conversion projects, big-box repositioning capital stacks combining bridge senior with mezzanine and preferred equity tranches, and structured debt strategies for trophy mixed-use ground-up developments where straightforward construction financing remained selective. Several Q1 2026 Atlanta, Miami, Nashville, and Charlotte structured debt placements included meaningful preferred equity allocations to mall-to-mixed-use conversion sponsors and mixed-use trophy ground-up sponsors.

CMBS retail special servicing rates on Southeast retail collateral remained elevated against historical norms but showed early signs of stabilization during Q1 2026 as 2023-2024 vintage modifications worked through the system. Class B regional mall and older unanchored strip collateral continued to dominate Southeast retail special servicing inventory, with several Q1 2026 modifications, note sales, and REO dispositions clearing through the system. Grocery-anchored, necessity-anchored, and mixed-use trophy collateral remained materially under-represented in special servicing inventory relative to portfolio composition, reflecting the bifurcated retail capital markets environment that institutional research consistently characterized through 2024-2025.

The Southeast retail sector in Q1 2026 confronted a bifurcated set of structural challenges and opportunities that institutional sponsors continued to navigate through capital markets execution and asset-level repositioning. The dominant aggregate challenge remained the continued secular reset on Class B regional mall and older unanchored strip product, with several major Southeast Class B regional mall properties advancing through note sale, REO disposition, mall-to-mixed-use conversion feasibility, or department store anchor replacement processes during 2025 and into Q1 2026. The aggregate Southeast Class B regional mall inventory continued to clear through institutional research projections at a pace that maintained meaningful price discovery through 2026.

The mall-to-mixed-use conversion thesis continued to expand across Southeast metros, with Atlanta leading the pipeline followed by Charlotte and Nashville. Several Class B regional mall properties advanced through entitlement, financial close, or initial demolition stages during Q1 2026, with mixed-use placemaking developments combining residential, retail, hospitality, and office components on former mall sites. The conversion thesis required favorable acquisition basis, supportive municipal entitlement frameworks, and capital stack flexibility combining bridge senior debt with mezzanine, preferred equity, and structured equity tranches. Several Q1 2026 Atlanta mall-to-mixed-use conversion financial closes referenced the Georgia adaptive reuse tax credit framework and Atlanta city-level density bonus framework as material economic supports. Charlotte and Nashville mall-to-mixed-use conversion activity remained at lower volume relative to Atlanta, though several Charlotte SouthPark-adjacent and Nashville suburban conversion feasibility studies advanced through 2025 and into Q1 2026.

Big-box repositioning activity expanded across the Southeast through 2025 and into Q1 2026 as vacant former Bed Bath & Beyond, Toys R Us, Tuesday Morning, and other big-box anchors were converted to medical office, fitness, entertainment, last-mile industrial, and necessity-anchored uses. The Southeast big-box repositioning thesis benefited from the broader Sun Belt population growth and household formation narrative, with conversions to medical office, last-mile industrial, and entertainment uses meeting demand from corporate inflow trade areas. Several Q1 2026 Atlanta, Miami, Charlotte, and Nashville big-box repositioning closes included bridge senior debt paired with sponsor equity, with stabilization timelines projected through 2026 and 2027.

Department store anchor replacement activity across Southeast Class A regional malls continued through Q1 2026, with vacant former Macy's, Nordstrom, Lord & Taylor, and Sears anchor boxes being converted to experiential retail, restaurant, fitness, entertainment, and contemporary fashion uses. SouthPark Mall in Charlotte, Streets at Southpoint in the Research Triangle, The Mall at Millenia in Orlando, and Aventura Mall in Miami all advanced department store anchor replacement initiatives through 2025 and into Q1 2026, with experiential retail, fitness, and contemporary fashion tenants representing the dominant replacement demand cohort. The Class A regional mall sector continued to outperform Class B regional mall through the post-pandemic cycle, with anchor replacement and tenant mix evolution sustaining trophy mall fundamentals.

Trophy mixed-use and high-street luxury retail across the Southeast continued to register the strongest fundamentals among retail subsectors, with Miami Brickell, Design District, and Bal Harbour leading the trophy luxury thesis followed by Atlanta Buckhead, Charlotte SouthPark, and Nashville Gulch. The trophy mixed-use thesis benefited from Sun Belt corporate inflow driving high-income household formation, Latin American gateway luxury demand in Miami, and tourism-driven experiential retail demand across Nashville and select Atlanta and Miami submarkets. Trophy mixed-use asking rents registered positive growth through 2025 and into Q1 2026, with several trophy mixed-use deliveries clearing at materially higher rents than 2023-2024 comparables.

Grocery-anchored and necessity-anchored retail across the Southeast sustained the strongest aggregate absorption among retail subsectors, with Publix, Kroger, Harris Teeter, Whole Foods, Wegmans, Sprouts, Fresh Market, and Aldi anchor commitments sustaining new development feasibility across the region's primary trade areas. The grocery-anchored thesis benefited from Sun Belt population growth, household formation, and the post-pandemic consumer behavior toward necessity-anchored daily-needs trade areas. Grocery-anchored asking rents registered positive growth through 2025 and into Q1 2026, with several Southeast grocery-anchored deliveries clearing at materially tighter cap rates than 2024 comparables, reflecting institutional capital re-engagement with the necessity-anchored thesis.

The single-tenant net-lease (STNL) retail subsector across the Southeast in Q1 2026 sustained continued institutional bid for the highest-quality investment-grade single-tenant credit, with CVS, Walgreens, Starbucks, Chick-fil-A, Dollar General, and Dollar Tree net-lease transactions clearing at cap rates consistent with broader institutional research benchmarks for the highest-quality single-tenant credit. The STNL subsector benefited from the necessity-anchored consumer behavior thesis and continued investor appetite for long-duration triple-net institutional retail credit.

The Southeast retail sector enters Q2 2026 with the strongest aggregate forward outlook among U.S. retail regions tracked in this institutional research series. Forward indicators point to continued positive absorption across grocery-anchored, necessity-anchored, mixed-use trophy, and high-street luxury subsectors through Q2 2026, with the secular reset on Class B regional mall and older unanchored strip product continuing through institutional research projections. Mixed-use trophy and grocery-anchored capital markets execution should sustain the institutional re-engagement thesis through Q2 2026, with CMBS and LifeCo allocations expanding modestly on the strength of Q1 2026 execution.

The Sun Belt corporate inflow narrative supporting Southeast retail demand should sustain household formation, rooftop expansion, and necessity-anchored absorption through 2026, with Florida, Georgia, North Carolina, Tennessee, and South Carolina continuing to register among the strongest U.S. state-level population growth and corporate relocation flows. The Federal Reserve's monetary policy trajectory through Q2 2026, paired with continued institutional research consensus on the longer-duration disinflation thesis, should support continued tightening of CMBS conduit spreads on stabilized trophy and grocery-anchored Southeast retail through 2026.

The Miami trophy luxury thesis should sustain through Q2 2026, with Bal Harbour Shops expansion, Miami Design District trophy luxury deliveries, and Brickell City Centre stabilization continuing the trophy luxury absorption narrative. International luxury brand flagship strategies across Miami should sustain through Q2 2026, with several major luxury brands continuing footprint expansion and flagship reformatting strategies. The Aventura Mall trophy luxury expansion should continue absorbing leasing demand through Q2 2026.

Atlanta's mixed-use trophy and grocery-anchored thesis should sustain through Q2 2026, with Ponce City Market, Atlantic Station, The Battery Atlanta, Avalon, and Halcyon continuing to anchor the placemaking thesis. The Atlanta mall-to-mixed-use conversion pipeline should advance through several major Q2 2026 financial closes, with the state of Georgia's adaptive reuse tax credit framework and Atlanta city-level density bonus framework continuing to support conversion economics. Big-box repositioning activity across Atlanta should sustain through Q2 2026 as vacant former big-box anchors continue to be converted to medical office, fitness, entertainment, and last-mile industrial uses.

Charlotte's SouthPark trophy luxury and grocery-anchored thesis should sustain through Q2 2026, with SouthPark Mall, Phillips Place, and adjacent Sharon Road trophy retail continuing to anchor the trophy luxury narrative. Nashville's Gulch, 5th + Broadway, and downtown trophy mixed-use thesis should sustain through Q2 2026, with experiential retail, restaurant, music industry merchandise, and tourism-driven contemporary retail continuing to anchor the placemaking thesis. The Research Triangle's grocery-anchored and necessity-anchored thesis should sustain through Q2 2026, with Publix, Wegmans, Harris Teeter, and Whole Foods anchor commitments continuing to support new development feasibility.

CMBS conduit execution on stabilized Southeast trophy mixed-use, grocery-anchored, and necessity-anchored retail should sustain the Q1 2026 institutional re-engagement through Q2 2026, with several Q2 2026 conduit pools expected to include meaningful Southeast retail allocations. LifeCo permanent financing on highest-quality stabilized Southeast trophy luxury, mixed-use trophy, and grocery-anchored retail should expand modestly through Q2 2026, reflecting continued life insurance company allocation expansion. Bridge debt activity on Southeast retail repositioning, big-box repositioning, mall-to-mixed-use conversion-ready, and grocery-anchored stabilization should sustain the Q1 2026 expansion through Q2 2026.

Cornovus Capital advises institutional retail sponsors across the Southeast on capital structure design, lender coordination, and execution for acquisitions, refinancings, recapitalizations, repositioning, big-box repositioning, mall-to-mixed-use conversion, department store anchor replacement, and ground-up trophy mixed-use development financing strategies. The Cornovus Capital institutional framework integrates Bridge, CMBS, LifeCo, qualifying Agency mixed-use, conditional SBA 7(a) and 504 for owner-user retail, and structured debt and private capital solutions for the most complex Southeast retail capital stack situations. The Cornovus Capital Q2 2026 institutional retail framework anticipates continued institutional re-engagement with Southeast trophy mixed-use, grocery-anchored, and necessity-anchored retail, with capital markets execution sustaining the Q1 2026 momentum through Q2 2026 and into the second half of 2026.

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