Nationwide

• Entering 2024, the U.S. retail market is at its tightest in years, with high demand, limited new supply, and fewer bankruptcies and closures. Demand grew by over 42 million SF in the past year, led by food and beverage, discount, off-price, and experiential sectors.

• Move-outs dropped nearly 20% from 2021-2023, with available space at a record low of 4.8%, 200 basis points below the 10-year average.

• Q1 2024 leasing slowed due to a lack of desirable supply, not demand. High-interest rates and housing demand are impacting new retail projects. The trend towards open-air shopping centers continues.

Phoenix Market Highlights

• In early 2024, the Phoenix retail market is booming with record-low vacancy rates, strong demand, and rising rents. Limited new construction and few store closures have kept market conditions tight.

• In 2023, Phoenix had 3.8 million SF of net absorption, second only to Chicago. Larger spaces are filled by grocers, gyms, and pickleball businesses, while quick-service restaurants and service tenants occupy smaller spots. The suburbs show strong demand due to household growth.

• The availability rate has hit a record low of 4.6%, slowing leasing volume. With only 1.1 million SF of new retail delivered in the past year, and significant demolitions over the past decade, supply remains tight. Average asking rents have risen 8.4% over the past year, making Phoenix a top rent growth market.
  
• Looking ahead, supply and demand are expected to stay balanced, with rent growth moderating but remaining above the long-term trend. Phoenix's positive factors, including population growth and purchasing power, should maintain stable market fundamentals.

With access to nearly 400 retail markets nationwide, we provide invaluable insight to support your commercial real estate investment goals. Reach out to us today to begin a conversation about how we can help you navigate the complexities of the retail real estate landscape.