Phoenix Retail Market Stays Hot

Phoenix’s retail market has an envious record of low vacancy rates, steady growth and rising rents. According to Avison Young’s recently released Second Quarter 2024 Phoenix Retail Market Report, the vacancy rates are hovering around 5%, below the national average.

Phoenix’s growing popularity has driven retail space demand beyond supply. Since 2019, the market has consistently had one to two million square feet remaining in the construction pipeline each quarter. In Q2 2024, 1.9 million square feet are in progress, with nearly 700,000 square feet delivered. Despite steady growth and many specific projects underway, there is still a lack of supply for single-tenant spaces, strip centers, and smaller retail spaces. 

Asking rents for Phoenix retail property continue to rise in this tight market. Additionally, rental growth over the past decade has been consistent. Since Q2 2020, rents have increased by 23%, reaching an average of $24.97 per square foot for all retail space types at the end of Q2 2024.