Sunbelt States Dominate Store Growth As Southern Retail Metros Heat Up

It’s not just snowbirds anymore, retail also loves the Sunbelt. America’s sun blessed states have become a hotbed for retail growth, as changing demographics shift the country’s store axis south.

It was Charlotte and Tampa that have once again highlighted the strength of Sunbelt retail real estate, topping an annual assessment of the nation’s most resilient and dynamic markets.

Among the 43 U.S. metropolitan areas with at least 100 million-sq.-ft. of retail inventory, Charlotte ranked first, according to CoStar Group, posting the strongest combination of asking rent growth (7.4%) and total return (11.6%) of any market in 2025, with Tampa close behind as the second-best performer.

Sunbelt dominance was evident throughout the rankings, with Orlando placing third, followed by Dallas and Norfolk, Virginia, in the top five, reflecting a mix of established and emerging growth hubs.

Orlando and Miami featured among the leading Florida markets overall, while Phoenix, Nashville and other fast-growing southern cities also registered strong fundamentals. Kansas City and Columbus completed the top 10.

CoStar Group’s methodology equally weights five factors — occupancy, availability rates, rent growth, changes in sales volume and total return as captured by its market price index — and underscores the growing gulf between expansionary regions and slower, mature-economy metros.

Charlotte’s retail story in 2025 has been shaped both by economic momentum and a flurry of new openings. SouthPark Mall attracted international attention with Zara’s 29,000-sq.-ft. flagship, while Grove Crossing, a newly completed grocery-anchored center in northeast Charlotte, drew tenants from discount grocers to fitness brands.

In Plaza Midwood and NoDa, independent retailers and lifestyle concepts opened as part of a broader wave of neighborhood retail that has kept vacancy rates tight and absorption robust. These openings have complemented Charlotte’s broader economic rebound, which has seen white-collar job growth outpace national trends and fuel demand for housing and consumer services.

Sunbelt Tops Retail Growth

In Tampa, the second-ranked retail market, asking rents grew at a solid pace and availability rates remained among the tightest in the country, even if the market did not lead in any single category.

Retail expansion in the Tampa Bay area this year has been notable for its diversity of formats. Grocery chain Publix opened a new 31,485-sq.-ft. supermarket on West River, anchoring neighborhood shopping in South Tampa, while Tampa Premium Outlets and adjacent mixed-use developments brought new restaurants, beauty retail and experiential tenants to the Wesley Chapel corridor.

The under-construction Interbay Commons project promises further retail, hospitality and entertainment alongside new homes.

Across the top markets, Orlando’s tight retail availability and population growth have sustained demand for both new and existing space, helping it secure a place in the top three, while Dallas’s scale and transaction kept its high ranking. Norfolk’s emergence near the upper end of the league table reflects smaller but rapidly tightening fundamentals in parts of the Mid-Atlantic.

The rapid expansion of retail economies across the U.S. Sunbelt reflects a convergence of long-running demographic, economic and real estate trends that continue to favor the region over many coastal and Midwestern peers.

Population growth remains the most powerful driver. States such as Florida, Texas, North Carolina and Arizona have absorbed a disproportionate share of domestic migration over the past decade, drawing households with their lower living costs, warmer climates and job opportunities.

Sunbelt Jobs Attract Migration

Sunbelt cities have also been particularly successful in attracting corporate relocations and investment in finance, technology, logistics and healthcare, which has fueled above-average white-collar job creation in metros such as Charlotte, Tampa, Dallas and Orlando, despite the national labor market cooling, driving rising household incomes.

Many Sunbelt metros also entered the post-pandemic period with relatively limited modern retail supply, the result of years of restrained development following the global financial crisis. And new construction has been disciplined, especially for shopping centers, keeping vacancy rates low and enabling landlords to push rents upward.

Lower corporate and personal taxes, along with business-friendly planning regimes, have also reduced retail operating costs and encouraged expansion. As a result, national chains have increasingly prioritized Sunbelt markets when rolling out new stores.

Open-air centers, grocery-anchored developments and mixed-use projects also fit well with suburban growth patterns and auto-oriented lifestyles, proving resilient to e-commerce and together these factors have created a virtuous cycle.

The underlying fundamentals also suggest Sunbelt retail economies are positioned to keep on outperforming.