Phoenix Retail Leasing Flat Lines in Fourth Quarter

Phoenix retail leasing activity flat lined at the end of 2018 with relatively flat leasing activity and an unchanged vacancy rate. This was a surprise following a strong performance for the first three quarters of 2018. Despite the blip in activity, the Phoenix retail market closed the year strong with vacancy at 7.8%, an 80 basis point year-over-year decrease, and 2.1 million square feet of net absorption, according to research from Colliers International. As a result, 2018 was the second strongest year for next absorption since 2013.

“There were a lot of purchase transactions and lease deals in the earlier part of the quarter, and when the latter half of December hit, the market slowed down,” Thomas M. Brophy, research director of Arizona at Colliers International, tells GlobeSt.com. “It doesn’t seem like there is any kind of trend so far. We have moved at a fine clip at the first part of this year, and it feels like we haven’t skipped a beat. It was a 20-day pause in December.”

The macro economic volatility in the US, which included a yo-yoing stock market, a government shutdown and an additional increase in interest rates, played a role in the market pause, according to Brophy. “The stock market went up and down through most of December, and people were concerned about the trade talks at the end of the year,” he says. “When you have that much action, it will cause people to pause for a second.”