Phoenix retail vacancy drops as leasing activity accelerates

By AZRE | Phoenix Business Journal

The first quarter of 2021 brought positive net absorption to the Greater Phoenix retail market, according to a report released today by Colliers in Arizona. Absorption pushed retail vacancy down and rental rates continue showing signs of growth.

The city lost significant jobs during the spring of 2020 as the pandemic unfolded, but many have been recovered. The retail trade supersector lost 29,000 jobs in April of last year and as of March 2021 approximately 99.6 percent of the lost jobs had been recovered. The leisure and hospitality sector, which lost 96,400 jobs, has only recovered 64.7 percent of its positions.

During the first three months of 2021 the city posted 246,897 square feet of net absorption.  This marks the highest level of net absorption since second quarter 2019.  The Northwest submarket cluster had the single largest move-in with Lifetime Fitness taking occupancy of 180,000 square feet.  Leasing activity increased 18 percent year-over-year.  The volume of new retail deals has increased 85 percent since the slowdown in second quarter 2020. 

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