Phoenix — The metropolitan Phoenix retail market ended the third quarter with a retail vacancy rate at 10.5%, down nearly a full point from 11.3% a year ago, according to CBRE’s Phoenix Retail MarketView report for the third quarter.
The market recorded positive absorption of 385,625 sq. ft. for the quarter and so far this year has absorbed 1.1 million sq. ft.
In the last 24 months, 1.3 million sq. ft. of new retail space has come to market across metro Phoenix. That compares to an average of 5.5 million sq. ft. per year from 2000 to 2010, with the high point coming in 2007 when 11.6 million sq. ft. arriving. So the market is absorbing excess space.
In terms of tenant activity, Class-A spaces and premium locations are receiving considerable interest from retailers.
CBRE also speculates that the slow recovery combined with online shopping have altered the metro Phoenix retail landscape. Despite the positive absorption, a lot of retail space remains vacant, especially in non-premium big box locations.
According to the “Third Quarter 2013 Economic Outlook,” published by the Forecasting Project at the University of Arizona, the state will see gains in jobs, income, population and retail sales in 2013, with growth accelerating next year.