The Metro Phoenix retail sector has rebounded significantly since the pandemic, with more than 1 million square feet of new space added in the last year and 2.7 million square feet under construction. The Q1 2024 vacancy rate rose slightly to 5.2% due to new construction, but remains historically low. Despite the first negative net absorption since the pandemic, experts are optimistic about future growth. High interest rates and construction costs pose challenges, but limited new supply is keeping prices high. Brick-and-mortar stores are thriving, often serving as last-mile fulfillment centers, and contributing positively to online sales. Overall, the retail market in Metro Phoenix is healthy and expected to remain strong.
