Colliers International 2020 Q3 Greater Phoenix Retail Market Report

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

Outlook: As new dynamics are formed in the brick and mortar environment, new creative ways of consumer shopping will test the market. Multiple variations of retail sales will be analyzed. These will include shopping online, with consumers driving to physical locations for product pick-up, as well as the option of using physical stores as a showroom for inventory with products shipped from the warehouse to homes. Large big box discount retailers and grocery stores will continue to drive the market, especially in the growing regions of the Valley.

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.

Retail Market Colliers International in Arizona

Colliers International 2020 Q3 Greater Phoenix Retail Market Report

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Phillip Hernandez

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Call now +1 602 222 5066

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Colleagues describe me as a brilliant storyteller and a passionate, creative and experienced professional.

Prior to joining Colliers, I served as a business analyst at CBRE, where I specialized in creating tailored research reports, as well as unique and interactive applications and dashboards that elevated the market position of assets.

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Casey Koziol

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Call now +1 602 222 5035

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As a research analyst for Colliers International in Arizona, I deliver in-depth analysis of current market conditions and trends for brokerage professionals and their clients. I compile market statistics across all property disciplines, including industrial, office, retail, healthcare, multifamily and land.

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