Phoenix’s retail market boasts a remarkable track record of low vacancy rates, consistent growth, and increasing rents. According to Avison Young’s latest report on the Phoenix Retail Market in the Second Quarter of 2024, vacancy rates remain below the national average at around 5%.
The city’s surging popularity has resulted in a high demand for retail space that surpasses its supply. Since 2019, there has been an ongoing construction pipeline with one to two million square feet being added each quarter. Currently, there are 1.9 million square feet under construction and nearly 700,000 square feet have already been delivered in Q2 of 2024. Despite steady growth and various specific projects underway, single-tenant spaces as well as strip centers and smaller retail spaces continue to face a shortage.
In this tight market environment for Phoenix retail properties , asking rents continue to rise steadily . Over the past decade alone , rental prices have consistently increased by an impressive amount . In fact , since Q2 of last year alone , rents have risen by an astounding rate of23% reaching an average price per square footof $24 .97 across all typesofretailspacesbythe endofQ22024.
