Dave Cheatham is an accomplished authority on retail real estate in the disciplines of brokerage, project leasing, development, consulting and advisory services. He is a senior advisor to merchants, entrepreneurs, investors and senior retail executives throughout the industry.
The Phoenix commercial retail market continues to improve in vacancy and increased leasing activity. The year closed with the strongest absorption recorded since before the Great Recession six years ago. Vacancy rates, once hovering near 14% have now dropped to where the market will be in single-digit vacancy by late 2014.
Leasing activity (absorption) of the Valley’s retail space continues to show an increase year over year. At the close of 2013, Velocity Retail Group’s research department tallied nearly 2.5 million square feet of retail absorption for the year. This is the highest rate of leasing activity since before the recession and the highest since 2007.
Vacancy rates which climbed to nearly 14% in 2011 have gradually decreased each quarter closing 2013 at 10.8%.
The Valley’s retail market totals over 172 million square feet in over 4,000 buildings. Velocity Retail’s research divides the Valley into six regional areas. At year-end the vacancy for the majority of these regional areas had improved to single digits. With little new construction and continued strong leasing activity by the end of 2014, all of the regional areas will be in single digit vacancy.
What does all this mean for Phoenix? Retailers are active with new national and regional restaurant concepts announcing their arrival in the market. Activity for shop space is increasing and rental rates for premium buildings are holding strong.
Phoenix is poised for continued progress in 2014.
