The Q1 2023 Phoenix retail market report by Avison Young shows a vibrant retail sector, with an inventory of over 189 million square feet in the Greater Phoenix area and new construction at decade-high levels. Despite the industry’s initial lull due to the pandemic, it has rebounded with net absorption increasing by 11.2%, and a historically low vacancy rate of 5.6%, suggesting underbuilding in the region. Factors contributing to the sector’s resilience include rapid adaptations during the pandemic such as right-sizing retail spaces and expanding outdoor dining options, trends expected to continue. Additionally, mixed-use projects and revitalized downtown areas are emerging as prevalent development trends, driving a strong, competitive market.
