"The vacancy, at this point, is still fairly reasonable and manageable," says Robert L. Young, senior vice president for CB Richard Ellis in Phoenix. "We haven't seen a huge uptake." Last year at this time, there was 9.5 million sf under construction. This year, there is 5.2 million sf being added to the 142.9-million-sf inventory, according to CBRE's just-released quarterly report.

"There will be some areas in which some of the newer centers might struggle," Young tells GlobeSt.com. "The newer centers will have more vacancies than they might have had a few years ago." Given the amount of retail space that's delivered since last year, he says the Q3 vacancy is "still not that bad." The market's vacancy has climbed just 0.9% in the past year.

The report was released within days of the $66.2-million sale of the Shops at Chauncey Ranch at 8868 Raintree Dr., which was the area's second highest retail transaction this year. Earlier this year, De Rito Partners Development Inc. of Phoenix bought the 1.1-million-sf Scottsdale Pavilions at 9175 E. Indian Bend Rd. for $88 million.

Young points out that Shops at Chauncey Ranch was somewhat of an investment anomaly. First, it came on the sales block in the spring when the marketplace was much different. "The another big anomaly is Chauncey Ranch is in North Scottsdale," says Young, who teamed with CBRE's vice presidents Steven M. Brabant, Glenn Smigiel and vice president Richard W. Abraham to sell the 168,504-sf center for Vertical Holdings Co. of Scottsdale. "It's not to say North Scottsdale is recession-proof, but it is more protected and more in demand by institutions and cash buyers."

The report bears out Young's conclusion. North Scottsdale's vacancy stands at 6.1% for the 14.5-million-sf inventory. Although Q3 absorption was down by 133,827 million sf, the submarket has one of the lowest vacancy rates in the metro. The region's leaders are the Tempe/Ahwatukee submarket, with a 5.6% vacancy in its 17.8 million sf, and Scottsdale, home of Scottsdale Pavilions, which 4.7% empty in its 4.6-million-sf inventory.