Phoenix Retail Vacancy Rates Lowest Ever

Vacancy rates for Phoenix retail property continue to shrink across all Phoenix submarkets – with the total vacancy rate in the greater Phoenix area seeing a drop of 20 basis points from 5.3% in Q2 2023 to 5.1% in Q3 2023 – the Valley’s lowest vacancy rate on record, that according to the latest Avison Young quarterly Phoenix Retail Market Report.

The post-pandemic period has seen a significant uptick in tenant demand, most notably in the grocery store and fitness center categories. These tenants are now actively filling up the larger voids in malls and new mixed-use developments at rates higher than pre-pandemic levels. 

“While interest rates and economic challenges have created uncertainty in the capital markets arena, they haven’t impacted the retail leasing market, which continued its strong upward trajectory.” said James DeCremer, Avison Young Principal – Phoenix.

Phoenix retail recorded 373,525 square feet of positive net absorption during the third quarter – marking the 12th consecutive quarter of positive absorption.