Metro's Growth Patterns Spawning More Retail

PHOENIX-A continued uptick in the housing market has meant continued and steady growth in the retail sector. Local experts tell GlobeSt.com to expect 2007 to be much like last year when everything from power centers to lifestyle projects broke ground.

"We're seeing a continuation of what started in 2005," explains Jeff Gorden, retail specialist with Scottsdale-based Retail Brokers Inc. "The demand has sparked the development, demand by retailers to be here."

Darren Pitts, senior vice president and principal with Staubach Co.'s retail group in Phoenix, agrees the development pace and job growth will continue. "As long as housing continues stable," he says, "retail growth will continue."

Noteworthy projects in 2006 included the start of construction on the 1.3-million-sf Tempe Marketplace and 144-acre mixed-use CityNorth plus Macerich's just-completed renovation of the 610,447-sf Biltmore Fashion Park in the Camelback Corridor. Interspersed between the larger projects have been groundbreakings for regional and neighborhood centers.

Pitts and Gorden don't see much of a slowdown in any direction, but concur that the western sector will be one of the region's leaders for development. Other hotspots will be Anthem to the north and the southeast Valley. "Mesa, Chandler and Gilbert, they've been here as long as Phoenix," Gorden says. "But as homes continue to be built there and people move there, that's where a good deal of retail demand is."

Neither Gorden nor Pitts is concerned about retail overbuilding, both basing their assessments on the pace of residential construction. As the rooftops grow so does demand from retailers, Pitts stresses.

Gorden says, though, that developers are being prudent. They aren't forcing buildings out of the ground until they're sure demand is there. "Folks are looking for growth," he adds, "but more prudent growth. We won't see the exuberance we've had in years past."