Q4 2024 remained strong for the Phoenix Retail market, driven by job growth and demographic expansion. However, major store closures, including 99 Cents Only and Big Lots, led to a net absorption decline of -270,000 SF. The market availability rate rose to 5.0% but remains well below pre-pandemic levels. Leasing activity picked up mid-year, with retailers like Dollar Tree, Aldi, and experiential tenants filling newly vacated spaces.
New supply remains limited, with just 970,000 SF delivered over the past year, mostly in high-growth suburbs like Buckeye and Queen Creek. Rents grew 5.6% year- over-year and 31.9% over five years, outpacing the national average. Rent growth is expected to slow to 4% annually by 2025, but Phoenix’s strong population growth and low construction pipeline should keep the market competitive.
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