The Phoenix retail market has reached a significant turning point, with the share of available space for lease dropping to 4.6% in the third quarter, surpassing the 4.9% national level—the lowest in at least 15 years. Over the past decade, Phoenix consistently had a higher availability rate than the national average, but a historic run of outperformance has led to a substantial decrease in vacancy and availability, down by 340 basis points since the fourth quarter of 2019, the largest decline among the 50 largest retail markets in the U.S. Phoenix benefits from strong population growth, net migration, and purchasing power, fostering retail expansion and minimizing store closures. The market is expected to maintain tight conditions, with a forecasted flat vacancy rate in 2024, reflecting the area’s limited construction pipeline, a robust local economy, and strong demographic momentum.
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Frequently asked questions
A full-service lease is a lease that has one, all-inclusive rental rate which includes both the base lease rate and the operating expenses combined into one figure.
A modified gross lease is a lease where the tenant pays base rent at the lease’s inception, but it takes on a proportional share of some of the other costs associated with the property as well, such as property taxes, utilities, insurance, and maintenance.
A triple net lease is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.
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