After the construction boom in 2006-2008 that saw 7 million to 9 million square feet of new retail space each year, Dave Cheatham of Velocity Retail Group thinks Phoenix is experiencing what many major markets have already gone through.
Cheatham has over 30 years experience in the retail real estate industry. He is the President of Velocity Retail Group which provides a full range of commercial real-estate services including leasing and selling of shopping centers, tenant representation, consulting, land brokerage, investment consulting, development to retail tenants, and redevelopment to owners of retail real estate throughout the West.
Cheatham notes that while new construction levels are steady at 1 million to 2 million square feet per year, smaller in-fill parcels are being redeveloped into new uses and are transforming some areas.
In 2017 there were 153 buildings constructed throughout the Phoenix market, totaling more than 1.75 million square feet.
Who is going into all of these buildings?
• Single-tenant or two to three tenant buildings make up 114 of those buildings. Tenants such as Salad and Go, The Human Bean, Starbucks, Panera Bread and Dutch Bros are sporting new buildings in these in-fill areas.
• Larger, single tenants occupy 35 percent of the new construction in 35 buildings. Goodwill, Ace Hardware,EoS Fitness, CVS, Main Event, Dierks Bentley, Boot Barn and Dollar General make up a few of those.
• Another 35 percent was from just five buildings: Fry’s Food and Drug opened three stores, Wal-Mart one, and At Home opened in Gilbert.