Phoenix Retail Investment Forecast
Clouds of Uncertainty Clear, Revealing a Glowing Long-Term Outlook that Elevates Investor Activity
Job gains and new residents a boon for consumption. Retail metrics have soundly improved after enduring some turbulence, and momentum will spill into 2022. Net absorption is expected to surpass 2 million square feet for the second straight year, dropping vacancy to the lowest year-end mark since 2007. Several factors are driving the uptick in space demand by retailers. Metro employment exceeded the 2019 peak by August of last year, spearheading consumers' ability to spend. At the same time, some seasonal residents have returned after staying put in 2020 and tourism is progressing. In the long term, the metro's swift expansion aids the outlook. Through the end of this decade, the household count is projected to grow by nearly three times the national pace. A larger resident base translates to higher levels of spending, encouraging retailers to enter or enlarge their market presence. Experiential tenants, one of the more impacted segments during the pandemic, inked several 2022 commitments, including Urban Air in Gilbert and EōS Fitness in Queen Creek. Traditional retailers are leasing as well, with Dick's Sporting Goods and Sportsman's Warehouse moving into facilities late last year.