Scroll Down
Robust Demographics Spur Rising Consumer
Spending, Even as Brief Headwinds Emerge
Retail in Phoenix at a turning point. The metro continues to record strong space demand driven by a growing consumer base, ranking third among major U.S. markets for projected net in-migration, household formation and population growth in 2024. Yet, sustained yearly deliveries of over 1 million square feet created an inflection point for fundamentals in June, with vacancy ticking up and asking rents declining on average. Seven submarkets had vacancy hikes between the first and second quarters, with over half rising by at least 40 basis points. Still, ongoing corporate relocations, like MiiHealth’s move to Downtown Phoenix and Comtech’s transition to Chandler, along with developments like KoMiCo’s semiconductor equipment cleanroom in Mesa, are expected to aid nearby retail. Consumer demand for goods is likely to improve as high-paying jobs are introduced to these areas, supporting retailer performance.