Q2 2026 Phoenix Retail Market Update
Market Overview
Phoenix retail market fundamentals remained resilient in Q2 2026. Strong leasing activity continued despite a modest increase in available space. Vacancy ended the quarter at 4.7%. Market rents climbed to $27.24 per square foot. Net absorption more than doubled from Q1, reaching 980,747 square feet.
Demand remains particularly strong for well-located neighborhood centers and small-shop space. Grocers, off-price retailers, experiential concepts, and service-oriented users continue to absorb available inventory.
Investment & Development Activity
Investment activity is also gaining momentum. Approximately $2.3 billion in retail sales were completed over the past year. At the same time, disciplined development is helping maintain healthy market fundamentals. Speculative construction remains limited. Much of the new supply is concentrated in fast-growing communities such as Buckeye, Queen Creek, Surprise, and Goodyear.
Submarket Performance
Submarket performance varied widely across the Valley. Gilbert led net absorption with 293,000 square feet. South Buckeye and North Buckeye followed, posting 473,000 and 601,000 square feet respectively. This reflects continued tenant demand in fast-growing West and Southeast Valley communities.
Queen Creek and Goodyear also posted strong absorption. Both submarkets recorded some of the tightest vacancy rates in the market, at 1.0% and 1.1%. On the other end, submarkets like Red Mountain/Mesa and Chandler saw negative absorption this quarter. Overall metro vacancy remained well below the national average.
Notable Transactions
Investment activity was highlighted by several notable transactions. These included the $36.49 million sale of Vineyard Towne Center in Queen Creek and the $14.05 million sale of Bethany Marketplace in Phoenix. Additional notable deals included Costco Plaza in Tempe, Grand Village Center in Surprise, and Foothills Park Place in Phoenix. These sales underscore sustained investor confidence in well-located Phoenix retail assets.
Explore the Full Report
Explore the full Q2 2026 Phoenix Retail Market Report below for submarket data, rent and vacancy trends, economic indicators, and notable transactions shaping the market. The full newsletter includes detailed projections and expert analyses. Download and share it for a deeper dive into the evolving dynamics of the Phoenix retail market
