Thank you for sharing!

Your article was successfully shared with the contacts you provided.

PHOENIX-The region’s retail market has closed out the third quarter with a 6.9% vacancy and 917,608 sf coming on line, the lowest delivery for any quarter since Q2 2007. One local expert has pointed out that fewer housing starts and wary retailers are leading to fewer developments, which is not necessarily a bad thing.

“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.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.