“Metro Phoenix retail stays hot as the Valley continues its rapid growth. This market trend is poised to continue as new retail development and construction fail to meet strong tenant demand,” said James DeCremer, a Principal with Avison Young in Phoenix.

Phoenix's growing popularity has driven retail space demand beyond supply. Since 2019, the market has consistently had one to two msf remaining in the construction pipeline each quarter. In Q2 2024, 1.9 msf are in progress, with nearly 700,000 sf delivered. Despite steady growth and many specific projects underway, there is still a lack of supply for single-tenant spaces, strip centers, and smaller retail spaces. Asking rents for Phoenix retail property continue to rise in this tight market. Additionally, rental growth over the past decade has been consistent. Since Q2 2020, rents have increased by 23%, reaching an average of $24.97 per sf for all retail space types at the end of Q2 2024.

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