By Brenda Nguyen CoStar Analytics
Large retail chains have paused expansion plans in Philadelphia in 2025. The sharp pullback in leasing activity comes as retailers nationwide announce store closures, grapple with rising costs and respond to more cautious consumer spending.
Only one big-box retail lease, defined for this analysis as larger than 50,000 square feet, was signed in the Philadelphia metropolitan area so far in 2025. In that deal, supermarket chain Giant signed a 60,000-square-foot lease in March to join Target as a co-anchor in Sadsbury Commons, a 360,000-square-foot power center currently under construction in Parkesburg, Pennsylvania. Target signed a 111,000-square-foot lease with developer The Provco Group last summer.
Such retail tenants as Club Studio Fitness, Apple Cinemas and Parky’s were active in signing the top local retail leases last year, but activity from fitness and experiential businesses—which typically account for the majority of big-box leases—has since stalled.
Retail leases in the Philadelphia region tend to be smaller, mirroring national trends. Since 2025, retail leases for spaces smaller than 3,000 square feet have accounted for 75% of the 570 retail leases signed this year.
Many of the retail businesses that are expanding remain focused on leasing smaller spaces. For example, Fulton Bank has signed 16 leases year to date, all measuring between 2,500 and 7,000 square feet. Dollar Tree has leased seven locations measuring between 7,500 and 18,000 square feet, and Planet Fitness has signed three leases ranging from 10,000 to 20,000 square feet.
The limited availability of big-box retail options may also be a contributing factor to the recent slowdown. Only 22 retail buildings in the Philadelphia metropolitan area have big-box availability, and five of them are still in the proposed stage. More than half of this available big-box space is concentrated within retail community centers or regional malls.
Grocers, fitness centers and experiential businesses such as restaurants and bars continue to be the primary drivers of big-box space demand nationally. National retailers such as Costco, Target, Lowe’s, and Hobby Lobby have signed some of the largest leases in the past year, reflecting their ongoing expansion strategies in other markets despite broader market caution.
While large-scale retail expansions have slowed, the continued leasing activity on the part of grocers and retailers for smaller spaces suggests that the retail leasing market may not be stagnant but rather adapting to changing conditions. Retailers and developers alike will be watching closely to see if consumer confidence rebounds and economic conditions stabilize, potentially reigniting demand for big-box spaces in the latter half of the year.
