Q3 2020 Retail Market
The Greater Phoenix retail market ended the third quarter in positive fashion, posting 101,270 square feet of positive net absorption.
- Leasing involved a hefty number of construction completions for large, big box retailers and grocery stores.
- Vacancy increased to 7.7%, elevating 10 bps over-the-quarter and 40 bps year-over-year
- Rental rates are struggling to maintain pre-pandemic levels, increasing 0.55% year-over-year but experiencing a decline of 0.20% over-the-quarter, ending at $14.62 PSF
- Five new projects were delivered this quarter, totaling 353,383 SF, entering the inventory with an extremely low vacancy of only 3.16%, due to large tenant commitments
- Investment sales volume (over 10,000 SF and over $1 million) attracted more investor interest, increasing 130% from last quarter to post $182,700,039 of sales. This sales figure marks a decline of 38% from third quarter 2019.
- Leasing activity gained strength, as the number of deals signed increased 122% over-the-quarter, but is still down 20% from this time last year
There are multiple quick-service restaurants looking to enter and expand in the Valley (delivery service is here to stay). Until consumers gain full confidence about dining restaurants, curbside pick-up will continue to be a dominating service offered at restaurants. This allows restaurants to continue operating, but with limited staff and occupancy. Phoenix will attract more investors because of the growing economy and population.
The upcoming election has placed Phoenix in the spotlight and positioned us as the nation’s top market for political advertising spending. At a local level, there are state propositions that could impact our economy and image as a pro-business city.
In the midst of the COVID-19 outbreak, information and data is emerging at a quick and uneven rate. The information contained herein has been obtained from sources deemed reliable at the time the report was written. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.