AZRE
The Greater Phoenix retail market is improving at a steady pace with vacancy dropping, rents ticking higher and investment activity gaining momentum. The city has seen positive trends despite the store closures of such national chains as The Room Store and Sports Authority.
Retail vacancy fell 10 basis points in the second quarter, reaching 9.4 percent. That level is 60 basis points below a year ago. The city has experienced a steady decline in vacancy since peaking in mid-2011. Strong tenant demand for space has led to 390,000 square feet of net absorption in second quarter and more than a million square feet year-to-date. This is a remarkable improvement over 2015 when mid-year net absorption was approximately 375,000 square feet. Vacancy drops have been exceptionally strong in the East Valley where vacancy has dropped 70 basis points in the past year. Net absorption in the first half of this year in the East Valley has far outpaced other regions in Metro Phoenix.
