Phoenix Retail Market Report

National tenants anchor resilient retail leasing. Major retail chains expanding in response to strong population growth helped Phoenix lead the country in net absorption in the first half of 2025, totaling more than 1.4 million square feet. Build-to-suit projects accounted for a large share of absorption, but tenant demand was also steady for existing space. Leasing activity through June was down only 6 percent year over year. Northwest and West Phoenix exemplified this trend. Move-ins from Home Depot and Fry’s supported vacancy falling under 4 percent, with the Northwest’s rate nearing all-time lows. A construction pipeline that is more than 80 percent pre-leased, including upcoming big-box openings from Target, Safeway and Sam’s Club, should reinforce tight market conditions.