"Our market is considered the residential market," explains Dave Cheatham, president and managing principal with Velocity Retail. "Homebuilding is one of our main industries. When the subprime went, so did housing." Because Phoenix' home sales collapsed in late 2007, this area arguably has seen problems in retail for a longer stretch than other areas in the nation.

CB Richard Ellis senior vice president Kevin Schuck indicates that at the close of 2009, vacancy was 400 basis points above year-end 2008 numbers. Across the market, he continues, vacancy stood at just above 7.5%. By late December 2009, he continues, vacancy was nudging toward the 12% mark. Absorption, he adds, was in the red, at around 1.2 million square feet. "It's the first time I've seen this since the late 1980s," he adds.

It's not likely to get better. At least, not right away. "My sense is that we've not yet hit bottom," Schuck explains, adding that more closures are likely to take place and more tenants, unfortunately, likely to lose their businesses. "The first half of this year will be difficult, but I'm optimistic that, in the second half, as the overall economy hopefully improves and overall elements that drive our market will be in play, that things will improve," he remarks.

"2009 was the year of no activity," adds Darren Pitts, Velocity Retail's senior vice president and principal. "In 2010, though, we'll see a lot of tenants repositioning in the market, as they've been dormant for 12 to 18 months."

Another "bright shoot" is an increase in housing starts. Pitts explains that the market historically can absorb between 30,000 to 35,000 new homes a year when the market is healthy. "Today, we've had around 17,000 housing starts," he remarks. "That's a healthy number, given what's been going on in the market."

All three brokers comment that the retailers weathering the current climate better than most are the discounters and fast-food restaurants. The product type that is standing up well to the situation is the grocery-anchored center. "Grocers are holding their own," Schuck remarks. "People are eating more at home, and this bodes well, by and large, for the grocers."

"When everyone pulled back, it wasn't to go to the high-end lifestyle center, but to go to the local Kroger or Safeway," Pitts adds. "Families still need to buy food."

Cheatham agrees with Schuck that the early part of 2010 will likely be quite tough. But there are two reasons, he points out, why late 2010 will likely signal a turnaround. First, with the average recession lasting 18 months, the economy is currently working its way out of the current one. "As you start to work your way out of a recession, you start to see things improve," Cheatham remarks.

Second, he goes on to say, is that consumer confidence is up. It's up a little, but it's up. "Some of these retailers now understand the sky isn't falling, People are adjust to the new normal, rather than the crazy, wild ride of 2005-2007," Cheatham explains. "Last Christmas (in 2008), people were predicting 30,000 store closings, and it didn't happen."

The brokers point out that the retail landscape has been dormant for so long, it'll take some time for it to move back to normal. Cheatham, continuing with the "growing plants" analogy, points out that the shoots have been underground for at least a couple of years, though things will change in 2010.

"Everyone's had to make corrections during the past couple of years, and those shoots have been dormant," he remarks. "2010 will be when a lot of people start popping their heads up and ask what they need to start doing. Things should really move in 2011, and we can go on from there."