The Phoenix retail market remained resilient in Q1 2025, posting 310,263 SF of net absorption despite a modest rise in vacancy to 4.8%. While national closures like 99 Cents Only and Big Lots increased available space, overall availability remains historically low at 5.1%. Leasing demand stayed strong, especially for spaces under 2,500 SF, driven by service-based, off-price, and experiential tenants. Asking rents rose 3.4% year-over-year to $25.62/SF, supported by steady consumer demand and limited new supply.
Construction activity remains measured, with 2.4 million SF underway and 67% already preleased. Most new development is concentrated in fast-growing suburbs like Buckeye and Queen Creek, where population growth continues to drive long-term demand. As one of the top-performing U.S. retail markets, Phoenix offers compelling opportunities for investors focused on suburban centers, value-add repositioning, and infill sites positioned for continued growth.
For a deeper dive into the evolving dynamics of the Phoenix retail market, including detailed projections and expert analyses, view the full newsletter below where you can download and share additional insights.
