Phoenix Retail Sector Sets Blistering Pace

Phoenix saw a strong finish to the year with 2.3 million square feet of retail space under construction in Q4 2023. In 2023, 1.5 million square feet were delivered, with 171,301 of that contributed in Q4 2023, indicating a slower completion pace than construction, according to an Avison Young survey.

“The retail market in Arizona is showing remarkable strength and promising trends that suggest it will remain strong and continue to thrive. For the first time in my 21-year career, vacancy rate is below 5%, and rents are on the rise.” said James DeCremer, Avison Young.

Retail vacancies in the Valley are at a two-decade low, with 4.9% direct space and 0.1% sublet space vacant.

Phoenix’s retail market is thriving, with asking rents reaching a decade high at $24.36/square feet annually and $2.03 square feet/month. This marks the highest rents the Valley has seen in recent years and positions the market as a national leader in annual rent growth.